Copper prices firmed up on Thursday after China announced major investments in building power networks in Africa, but upside in the metal was limited by technical weakness.
The most traded three-month copper contract on the London Metal Exchange was up 0.6% at $9,016 per metric ton at 1026 GMT, bucking the declines across the rest of the metals complex.
China on Thursday pledged nearly $51 billion in funding for Africa, with a focus on improving power networks whose shortcomings have delayed industrialization in the resource-rich continent.
Copper is widely used in electricity transmission for wind and solar plants due to its high conductivity.
But copper prices still remained below moving averages including 21 days and 50 days, signalling technical softness, said one trader.
He expected copper’s resilience to be short-lived and for it to dip below the $9,000 mark soon. “Every other metal has reverted back to previous levels after rallies in May,” the trader added.
Uncertainty in the global economic outlook still weighed on metals consumption.
U.S. manufacturing contracted at a moderate pace in August, while China’s manufacturing activity sank to a six-month low in the same period. The sector accounts for a large portion of metals demand.
Zinc, mainly used to protect steel from corrosion, fell 2% to $2,740.
The decline came after major Russian zinc miner Ozernoye started production earlier than expected after a fire destroyed its facilities. “Nobody expected it to come back this year,” a major buyer of mined zinc said.
Among other metals, aluminium was down 0.8% at $2,378.50 a metric ton, nickel dropped 1.5% to $16,970, LME lead slipped 0.9% to $2,001.5 a ton and tin declined 0.5% to $30,340.
China will release its August trade, inflation, and credit data in the coming week to shed more light on metals demand prospects in the remainder of the year.
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