LONDON: Copper prices edged lower on Thursday on weak consumer inflation data in top metals consumer China and a firm dollar.
Three-month copper on the London Metal Exchange was down 0.2% at $9,359 per metric ton by 1015 GMT, moving further away from a 14-month peak of $9,523 touched on Tuesday.
Data on Thursday showed China’s consumer inflation cooled more than expected in March, while producer price deflation persisted as demand remained weak.
“The question is will China continue to provide piecemeal stimulus? A lot of their stimulus is green-focused and base metal intensive,” said Nitesh Shah, commodity strategist at WisdomTree.
Copper and global stocks markets declined on Wednesday after U.S. inflation data rose more than expected in March, pushing out the expected timing of a first rate cut to September from June.
That sent the dollar index to a near five-month high, while the currency extended gains on Thursday, making it more expensive to buy greenback-priced commodities for customers using other currencies.
Shanghai copper hits all-time high on demand optimism, supply cut prospect
“The macro picture is overriding the fundamentals at the moment, but I think the pull back we’re seeing right now will be temporary. We may see weeks, possibly a month of consolidation,” Shah said.
“The reason why rates aren’t being cut so soon is because there’s strength in the U.S. economy, which should be positive for demand for cyclical things such as base metals.”
The most-traded June copper contract on the Shanghai Futures Exchange shed 0.4% at 76,270 yuan ($10,539.48) per ton.
SHFE will begin restrictions on the maximum intraday position opening volumes for the copper contract from April 12.
In other metals, LME aluminium rose 0.4% to $2,464.50 a ton, zinc dipped 0.2% to $2,731.50, lead eased 0.4% to $2,165.50, nickel dropped 1% to $18,175 and tin slipped 0.2% to $31,960.
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