LONDON: Copper prices dipped on Thursday, weighed down by a strong dollar and uncertainty over how much more economic stimulus will be unleashed in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) slipped 0.4% to $9,640 a metric ton in official open-outcry trading, having hit its lowest in more than two weeks on Wednesday.
Prices have returned to levels reached before China started announcing supportive measures for its flagging economy, which have been below expectations and lacked detail.
“Metals will probably be in a holding pattern ahead of a catalyst that will hopefully come when the minister of finance holds a press conference,” said WisdomTree commodities strategist Nitesh Shah. China’s finance ministry will detail plans on fiscal stimulus to boost the economy at a news conference on Saturday.
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“If a fiscal package has significant amounts of actual spending on the real estate sector, possibly combined with further support for new energy infrastructure, we may start to see some of the stockpiles come down,” Shah said.
The most traded November copper contract on the Shanghai Futures Exchange (SHFE) closed 1% down at 76,870 yuan ($10,869.93) a ton, tracking overnight losses in London.
However, demand risk remains. “The latest rally in copper prices, as well as the (Oct. 1-7) National Day Holiday, has weakened purchasing interest of semis manufacturers, especially copper wire rod players,” said Wood Mackenzie consultant Zhifei Liu.
LME copper prices have declined 1.3% this month after rising 6.4% in September for the best monthly gain since April. Also pressuring metals was a strong dollar, making commodities priced in the US currency more expensive for buyers using other currencies.
Among other metals, LME aluminium rose 0.6% to $2,556 a ton, nickel added 0.4% to $17,445, zinc was up 0.5% at $3,034 and tin gained 0.9% to $32,775 while lead slipped 0.4% to $2,053.
Source: Brecorder
