LONDON: Copper prices in London reversed from a seven-week high on Friday, shrugging off support from tightening inventories as the US dollar bounced and investors took the opportunity to lock in profits from the metal’s 2.6% weekly gain.
Benchmark copper on the London Metal Exchange (LME) was down 0.4% at $9,026 a tonne by 1601 GMT after reaching $9,183, the highest since Feb. 22.
Copper has been supported by the dwindling exchange-monitored stocks and robust March trade data from top metals consumer China which showed an unexpected surge.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange are down 4.0% this week. Copper stocks in LME-registered warehouses hit their lowest since 2005 on Friday.
The dollar bounced off a one-year low on Friday, making metals costlier to buyers holding other currencies, after a decline in US retail sales suggested the economy is slowing but not fast enough to stop the Federal Reserve from raising interest rates again in May.
Despite copper’s 2.6% weekly growth, some analysts suggested that the metal would not find enough support to rally further.
“While prices could still trade above $9,000 next week, fundamentals suggest a limited upside,” said Soni Kumari, a commodity strategist at ANZ Research.
China’s spot demand looks subdued and signals for supply are improving as production in Chile recovers and amid strong refined copper production in China, Kumari added.
Prices for the metal used in electrical wiring hit a seven-month high of $9,550.50 in January on hopes that Chinese demand would rebound after the country abandoned COVID-19 curbs but retreated when consumption failed to pick up quickly.
Chile, the world’s top copper producer, said on Thursday its output would pick up in coming years after last year’s fall.
Among other metals, LME lead hit its highest since Jan. 30 at $2,179.5 and nickel touched its highest since March 3 at $24,785.
Aluminium gained 0.6% to $2,380 a tonne, zinc climbed 0.6% to $2,853, nickel added 2.1% to $24,200, tin advanced 1.9% to $24,900 and lead rose 0.8% to $2,162.5.
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