LONDON: Copper prices fell on Friday but were set to end the week up 3.5% as bets that inflation may have peaked in the United States powered a broad shift towards riskier assets.
Other industrial metals were up between 2.5% and 7% this week after the inflation figures fuelled hopes that the U.S. Federal Reserve will need fewer interest rate rises, causing less economic damage.
Data also showed on Friday that euro zone industrial production grew three times more than expected in June.
Global stock markets headed for a fourth consecutive week of gains and the dollar weakened, making dollar-priced metals cheaper for buyers with other currencies.
Benchmark copper on the London Metal Exchange (LME) was down 0.4% at $8,144.50 a tonne by 1035 GMT.
Prices are up about 17% from a low in mid-July but a global economic slowdown still means the metal used in the power and construction industries has lost 25% from its March peak.
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“We’ve had a strong rebound based on short-covering and momentum buying,” said independent analyst Robin Bhar.
“Recession fears are there, but they seem to have been already priced in. We don’t really have the cushion we’d usually have with inventories.”
A total of 231,000 tonnes of copper is stored in warehouses monitored by the LME, the Shanghai Futures Exchange and the COMEX exchange in New York, down from about 375,000 tonnes a year ago.
Copper import premiums in China, the top consumer, are at an eight-month high, suggesting rising demand for overseas metal.
However, Copper prices have yet to break above their downtrend from March and most speculators think they will fall further.
Bhar said he expected prices to be about $7,500 at year-end.
Other base metals fell but were up on the week.
LME aluminium was down 1% at $2,494.50 a tonne on Friday, zinc fell 1.6% to $3,629.50, lead lost 0.4% to $2,189.50 and tin was down 1.3% at $25,065.
Nickel bucked the trend, rising 0.5% to $23,780.