LONDON: Copper prices rebounded after slumping to their lowest in nearly four months on Thursday after US economic data spurred gains in the dollar and investors worried about demand in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) was up 0.3% at $8,574.50 a tonne by 1605 GMT, bouncing after hitting its lowest since Jan. 6 at $8,426. Investors focused on the inflation element of US economic data on Thursday, which was higher than expected, prompting gains in the US dollar index.
A stronger dollar makes commodities priced in the US currency more expensive for buyers using other currencies.
But copper prices later recovered as gains in US stocks on the back of strong earnings encouraged buying of other risky assets, a trader said.
Earlier, data on Thursday also showed that profits at Chinese industrial companies fell 19.2% in March, underlining fragility in a sector that is a key consumer of metals.
“China’s recovery from COVID and from the weakness last year is only taking place gradually in the industrial and construction sectors,” said Edward Gardner at Capital Economics.
Chinese companies that make copper products told Reuters they are cutting output for the second quarter, typically the peak demand season, because of a slower than expected recovery in domestic consumption after COVID-19 and sluggish exports.
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