LONDON: London copper prices pulled back on Thursday after five sessions of gains, as unease surrounding high interest rates curbing global growth offset optimism about an uptick of demand in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) slipped 0.9% to $8,375 a metric ton by 1000 GMT, after touching its highest since Aug. 10 on Wednesday.
“These are corrective bounces that we’re seeing in a fairly neutral to bearish market, where you buy the dips and sell the rallies,” said independent consultant Robin Bhar.
Copper declined after failing to break through resistance at the 100-day moving average of $8,469, a technical level used by traders.
Copper rises with improved Chinese demand prospects
“The physical market in copper does look fairly robust, but the market wants to see more news on China stimulus, which seems to be coming out in dribs and drabs, but nothing really solid,” Bhar added.
However, copper prices on the Shanghai Futures Exchange (SHFE) hit a near three-week high amid hopes of demand pick-up fuelled by policy support and the peak consumption season coming up in China.
China’s Yangshan copper premium rose to $48 a ton, the highest since July 7, indicating rising demand for imported copper.
A firmer dollar weighed on metals prices, as investors were cautious ahead the Federal Reserve’s Jackson Hole symposium.
A strong dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.
The Jackson Hole meeting of global central banks takes place after a series of interest rate hikes that have curbed economic growth and demand for metals.
SHFE lead hit a more than 17-month peak of 16,565 yuan a ton on fear of a shortage of readily available inventory that can be delivered against large short positions.
On the LME, lead eased 0.1% to $2,185 a metric ton.
LME aluminium fell 0.8% to $2,163 a metric ton, nickel dropped 1.9% to $20,565, tin lost 0.6% to $25,965 while zinc edged up 0.1% at $2,373.50.
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