LONDON: Copper prices climbed to their highest in more than a month on Monday, spurred by hopes of further stimulus from China, but weak manufacturing data from the top consumer and concerns about demand capped gains.
Benchmark copper on the London Metal Exchange (LME) had gained 1.8% to $8,820 per metric tonne by 1609 GMT. Earlier it hit $8,840.50, the highest since June 22.
LME copper is on course for its best monthly performance since January when expectations of a pick-up in manufacturing activity and strong demand were boosted by the end of China’s zero-COVID policy.
However, China’s manufacturing sector contracted for the fourth month running in July, official surveys showed on Monday, suggesting weak metal consumption.
China released further policy guidelines on Monday but no concrete measures to boost its economy, while Beijing and Shenzhen said over the weekend they would implement measures to better meet homebuyers’s needs, without giving details “The market is trying to look past the data. The perception is there will be more Chinese stimulus, if only to prop up the property market,” a copper trader said.
Supporting sentiment after the New York open was the softer US currency making dollar-denominated commodities cheaper for holders of other currencies, which could help demand.
The dollar is heading for a monthly loss due to prospects that the US Federal Reserve’s aggressive rate-hike cycle - a driver of the dollar’s strength - may have concluded with last week’s 25-basis-point increase.
“The dollar is not as much of a negative as it was and could help base (metals), but for a healthy outlook we need an improvement in underlying fundamentals,” the copper trader said.
Elsewhere, aluminium rose to a two-week peak at $2,289 a metric tonne as a break of the 100-day moving average triggered buying. It was last up 2.9% at $2,287.
In other metals, zinc added 2.6% to $2,563, lead was flat at $2,158, tin advanced 0.1% to $28,770 and nickel fell 0.1% to $22,275.
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