BEIJING: London copper rebounded on Friday, but was set for its biggest weekly loss since September on demand concerns from top consumer China and a firm U.S. dollar.
Three-month copper on the London Metal Exchange rebounded 0.6% to $8,238.50 per metric ton by 0343 GMT. The contract has lost 2.9% so far in the week.
The Shanghai Futures Exchange (SHFE) was closed on Friday and next week for the Lunar New Year holiday.
The prolonged property sector crisis in China has weighed on sentiment given that construction is a major consumer of base metals. And data on Thursday showed the biggest fall since 2009 in its consumer prices, exacerbating near-term demand worries.
The world’s second largest economy has also struggled with its plunging shares markets, triggering a series of rescue actions by Beijing.
Pre-holiday restocking this year proved to be smaller than before, said China Futures analysts, expecting the property sector woes to result in lacklustre demand for copper tube and strip throughout the whole year.
Copper retreats on Chinese demand uncertainty
Recent disappointing buying and higher-than-expected January output of refined copper have seen inventories rising.
On-warrant copper stocks on SHFE climbed for a seventh straight week this week to hit the highest level since May 2023.
However, consumption of some other copper products like rod and foil will benefit from the power and renewable energy sectors, analysts said.
Mine-side disruptions also cast risks over supply.
Also weighing on the market was a steady dollar after U.S. unemployment benefits data again pointed to a resilient labour market, reinforcing the Federal Reserve’s message that interest rates are unlikely to be cut in the near term.
A stronger dollar makes it more expensive to buy the greenback-priced commodity.
Among other metals, LME aluminium dipped 0.2% to $2,218 per ton, lead shed 0.1% to $2,052, while nickel gained 0.1% to $16,030 and zinc was up 0.2% at $2,331.
Source: Brecorder
