LONDON: Copper prices rose on Monday as resurgent appetite for riskier assets lifted global stock markets and weakened the dollar, but a manufacturing slowdown pointed to weak metals demand.
Benchmark copper on the London Metal Exchange (LME) was up 0.2% at $7,933 a tonne by 1129 GMT after touching $7,955 for its highest since July 5.
Prices of the metal used in power and construction tumbled from a record high of $10,845 in March as rapid increases to interest rates combined with coronavirus lockdowns in China to stifle economic growth.
But copper has risen from a low of $6,955 in mid-July on hopes that the U.S. Federal Reserve’s monetary tightening will be less aggressive than previously expected and that China will stimulate its economy.
Global equities hit seven-week highs on Monday and the dollar fell to a one-month low, helping dollar-priced metals by making them cheaper for buyers with other currencies.
“It’s looking encouraging (for copper). If the Fed can slow down on rate increases and China does what it has promised, it’s looking better and better,” said independent analyst Robin Bhar, adding that stocks of metal are low and supply constrained.
Copper touches three-week peak on U.S. rates and softer dollar
Metals demand has been muted, with surveys showing weak factory activity across Asia and Europe in July, adding to fears of recession.
In China, the biggest consumer, a manufacturing slowdown added to a slump in the property sector and rising job cuts.
Speculators in copper on the COMEX futures exchange are still betting that prices will fall.
However, Chinese officials have promised to support troubled sectors and stimulate growth, with signs emerging that demand there is increasing.
Yangshan copper import premiums have risen to $94 a tonne, their highest since December, pointing to increased demand for overseas metal.
Stockpiles in Shanghai Futures Exchange (ShFE) warehouses, at 37,025 tonnes, are close to December’s 12-year low of 27,171 tonnes.
LME aluminium was down 1.9% at $2,441 a tonne, zinc fell 0.3% to $3,299, nickel advanced 3.1% to $24,345, lead gained 0.7% to $2,049 and tin was up 1.8% at $25,500.
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