LONDON: Copper prices rebounded on Friday after two days of losses, helped by continued hopes for stimulus in top metals consumer China and as investors cancelled some bearish positions ahead of the weekend.
Three-month copper on the London Metal Exchange rose 0.5% to $8,608 per metric ton by 1100 GMT and the contract was up 1.8% on a weekly basis.
“I suspect we’re getting some end-of-week covering coming through. We’ve been getting short covering rallies within an overall bear trend,” said independent consultant Robin Bhar.
Copper creeps higher on hopes US rate hikes are over
Pledges from the Chinese authorities to boost the country’s troubled property sector have been fuelling bullish sentiment.
But Bhar said the Chinese government is likely to only offer limited help, aiming to stabilise the property sector and not over-stimulate it.
“The government wants to de-leverage and clean up the economy, so I’m not hopeful that the property sector will get enough support to see the metals rally in coming weeks,” he said, adding the sector probably accounts for 30-40% of Chinese metals demand.
The most-traded September copper contract on the Shanghai Futures Exchange closed 0.1% lower at 69,100 yuan ($9,649.36) per metric ton, but gained 0.5% from a week earlier.
A firm dollar - boosted by worries of further rate hikes after data showed the U.S. economy grew faster than expected in the second quarter - made greenback-priced metals more expensive to holders of other currencies.
A Reuters poll showed analysts have trimmed price forecasts for copper and other industrial metals as supply expands while demand in top metals consumer China remains muted.
LME aluminium was little changed at $2,204.50 per metric ton, nickel rose 0.9% to $21,890, zinc advanced 0.9% to $2,476.50, lead edged up 0.2% at $2,162.50 and tin climbed 0.7% to $28,885.
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