LONDON: Copper prices were steady on Tuesday after hitting the lowest in almost two weeks as investors waited for signals that demand was recovering in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) edged up 0.1% to $8,879 per metric ton in official open-outcry trading, after falling to its lowest since March 13 at $8,810.
“Copper took quite a beating last week and the question is whether we can consolidate above key support of $8,770,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper has eased after hitting an 11-month peak of $9,164.50 on March 18, triggered by a rare agreement by China’s copper smelters to cut output.
“We need to see something on the demand side in China, some of these smelter curbs and the inventory build-up as a temporary post-Chinese new year development,” Hansen said.
Copper inventories in warehouses registered with the Shanghai Futures Exchange (SHFE) fell only slightly last week after the strongest seasonal surge since 2020. The SHFE May copper contract closed down 0.6% at 72,000 yuan ($9,973.40) a ton.
It fell to 71,720 yuan earlier in the session, the lowest level since March 15. Weakness in copper during Asian trading was attributed to an easing of the yuan against the dollar due to expectations that easier monetary policy at home and a strengthening dollar would lead to more weakness in the Chinese currency.
A decline in the yuan dents purchasing power for investors using that currency to buy greenback-priced commodities. The discount of LME cash copper to the three-month contract expanded to a record high of $115.37 a ton on Monday, LSEG data showed, indicating abundant near-term supply.
LME aluminium dipped 0.1% in official activity to $2,324 a ton, nickel dropped 1% to $16,770, zinc lost 1% to $2,470, lead eased 0.4% to $2,026 and tin shed 0.4% to $27,475.
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