LONDON: Copper prices rose on Thursday from a 10-week low the day before as central bank support for embattled bank Credit Suisse eased fears of further turmoil in the banking sector.
European markets rebounded after the 50 billion Swiss franc ($54 billion) lifeline to Credit Suisse, whose troubles followed the collapse of two mid-sized U.S. lenders last week.
Financial industry stress has raised fears of more bank failures and weaker economic growth.
Benchmark copper on the London Metal Exchange (LME) was up 0.6% at $8,559 a tonne at 1111 GMT after falling 3.7% on Wednesday, its biggest single-day slide since July.
The metal used in electrical wiring was hovering just below its 100-day moving average, which could become a technical resistance level.
“With the loss in confidence, you get an effective credit tightening … every risk asset out there is seeing some sort of damage,” said WisdomTree analyst Nitesh Shah.
Copper prices fall on stronger dollar and banking woes
A risk-averse mood on wider markets could hold copper prices down but the metal’s fundamentals remain strong, Shah said, pointing to rising demand in China and planned spending globally on electrification and infrastructure.
In China, the biggest consumer, Yangshan copper import premiums have begun to rise, pointing to improving demand.
Markets were awaiting interest rate decisions from the European Central Bank on Thursday and the U.S. Federal Reserve later this month.
Turmoil in the banking sector may see one or both central banks shy away from rate rises that would restrict economic activity.
On the supply side, First Quantum Minerals has resumed operations at its Cobre Panama copper mine, streaming company Franco-Nevada Corp said on Wednesday.
LME aluminium was down 0.2% at $2,273.50 a tonne, zinc fell 0.4% to $2,854, nickel rose 0.1% to $23,030, lead slipped 0.1% at $2,066 and tin was down 2.7% at $21,860.
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