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 down 0.1% at $9,107 a metric ton as at 1605 GMT. It was down 2.2% for the week.
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. 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 US 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 US currency, making dollar-priced metals cheaper for holders of other currencies.
In other metals, aluminium gained 0.8% to $2,288.5 a ton, LME lead was up 2% at $2,071, zinc lost 0.5% to $2,667.5, tin gained 0.6% to $29,585 and nickel was up 0.4% at $15,835.
Comments
Comments are closed.