LONDON: Copper prices dipped on Tuesday after signals from a top Chinese official about more economic stimulus were offset by concern over slower growth and rising interest rates in the West.
Three-month copper on the London Metal Exchange (LME) was down 0.2% at $8,371 per metric ton by 0945 GMT.
LME copper has rebounded by about 7% since hitting its lowest in nearly six months about a month ago.
Base metals and wider financial markets were lifted by comments from Chinese Premier Li Qiang, who said that China will take steps to boost demand and invigorate markets.
“My sense is that all those policy measures in China will still be fairly targeted and moderate,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.
“Even if you get some measures from China, I don’t think it’s going to encourage a sustained rally. I think the market is likely to be fairly range-bound.”
She added that U.S. interest rates could rise again in July and the dollar is likely to remain strong, making for “sustained macro pressure across commodities”.
London copper rebounds on low supplies; firm dollar weighs
The most-traded July copper contract on the Shanghai Futures Exchange (SHFE) eased by 0.1% to 68,460 yuan ($9,489.75) per metric ton, having risen as much as 0.3% earlier in the session.
The premium on LME cash copper over the three-month contract rose to $40 a ton, the highest since last November, indicating tightening near-term supplies.
On-warrant copper inventories fell to 25,725 metric tons, the lowest since October 2021, LME data showed on Monday, though they rebounded slightly in Tuesday’s data.
Inventories of the metal in SHFE and Chinese bonded warehouses have also been declining.
“While LME copper prices remain under pressure, given concerns over Chinese demand and a more hawkish Fed, LME copper spreads continue to strengthen, reflecting some tightness in the prompt market,” ING analysts said in a report.
LME aluminium rose 1.4% to $2,179.50 per metric ton, nickel climbed 1.6% to $20,635, zinc advanced 1.3% to $2,357, lead was up 1.1% at $2,092.50 and tin rose 1.3% to $25,960.