LONDON: Copper prices were on track for a third consecutive weekly decline on Friday on concerns that a return of physical buying could be short-lived in top consumer China as the economy remains sluggish in the absence of significant stimulus.
Three-month copper on the London Metal Exchange (LME) was up 0.2% at $9,142 a metric ton by 1028 GMT. It was down 1.8% on a weekly basis.
More Chinese copper consumers returned to the market after a tepid two months, attracted by prices that had retreated by 17.8% from their record high in May.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange (ShFe) declined to a two-month low of 301,203 tons, data showed on Friday.
“Consumers have been waiting for this pullback for a while,” said Tom Price, head of commodities strategy at Liberum.
Copper falls below $9,000 level on China demand concerns
Price said he expects this dip-buying from physical users to provide short-term support to prices around the $9,000 level.
“But we still see some downside, with expectations of a quieter second-half,” he added.
China this month reported weaker than expected economic growth and investors were disappointed after a key leadership gathering pointed towards policy continuity rather than any structural shifts.
The U.S. Federal Reserve’s monetary policy meeting on July 31 is also in focus, with investors looking for clues on interest rate cuts that market participants widely expect to begin in September.
A rate cut could pressure the U.S. currency, making dollar-priced metals cheaper for holders of other currencies.
In other metals, LME lead was up 1% at $2,048.50 a ton, zinc moved 0.9% lower to $2,656, tin rose 0.5% to $29,550, nickel was up 0.3% at $15,815 and aluminium gained 0.5% to $2,282.
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