LONDON: Copper prices edged higher in London on Tuesday, for the first time in five sessions, as efforts by top metals consumer China to stabilise its markets and lower metal inventory provided support, though a strong dollar capped gains.
Three-month copper on the London Metal Exchange (LME) rose 0.3% to $8,382 per metric ton in official open-outcry trading. Battered Chinese shares leapt to their largest one-day gain in two years on Tuesday on a slew of signals that authorities are strengthening their resolve to support slumping markets.
“The yuan shows signs of stabilising following big stock market gains in China as Beijing intensifies efforts to stem the rout,” said Ole Hansen, head of commodity strategy at Saxo Bank.
On the technical front, copper is also supported by the 200-day moving average at $8,348.5, Hansen added. Copper inventories in the LME-registered warehouses slipped further, according to the daily data, to reach fresh five-month lows. The metal, used in power and construction, is attempting to end the four-session decline caused by revised US Federal Reserve rate cut expectation and the strong dollar.
The dollar index remains close to its 11-week high, making dollar priced metals more expensive for buyers using other currencies. Meanwhile, the nearby demand in China is muted as Beijing is approaching the Feb. 9-16 Lunar New Year holiday. Also indicating weak current demand, LME cash copper’s discount to the three-month contract ended Monday at a record high of $112.
Among other LME metals, aluminium edged up 0.3% to $2,220 per ton in official activity, zinc advanced 0.3% to $2,427, lead climbed 0.1% to $2,115, while tin rose 1.9% to $25,300.
Nickel dipped 0.9% to $15,875 after touching its lowest since Nov. 27 of $15,850. Pre-holiday demand for stainless steel, which needs nickel, is muted in China, and LME nickel stocks are at the highest since May, 2022.
Source: Brecorder
