BEIJING: Prices of copper and other metals in London kicked off the week higher on Monday, following data showing growth of China’s service activity, while prospect for deeper interest rate cuts by the United States also weighed on sentiment.
Three-month copper on the London Metal Exchange climbed 1.2% to $9,165.50 per metric ton by 0419 GMT, while the most-traded September copper contract on the Shanghai Futures Exchange slid 0.6% to 73,530 yuan ($10,292.12) a ton.
Growth in China’s services activity accelerated in July helped by new orders, although momentum in overseas demand eased to its slowest pace in 11 months, a private-sector survey showed.
The data sparked some optimism over the market digesting a slew of worrying reports last week showing weak manufacturing activities in China and slow job growth in the U.S.
Meanwhile, the U.S. job report on Friday also fuelled expectations of deeper interest cuts by the Federal Reserve, starting from September. That could bolster industrial activities and metals demand.
Copper bounces on potential US rate cuts
Also supporting prices were more buying after previous sell-offs.
Bullish factors previously such as strong China demand and smelters’ output cut faded but investors still buy the dip given the long-term optimism towards copper, traders said.
LME copper lost 8% over the past four weeks. Analysts at ANZ expect metal prices to bottom out soon as current prices could trigger a supply response.
That said, Guangzhou Futures analysts eyed limited room for prices to grow given looming recession fears on the U.S. economy.
LME aluminium added 0.8% to $2,282 a ton, zinc moved 1.4% higher to $2,689, tin rose 1.5% to $30,645, and nickel increased 0.8% to $16,410.
SHFE aluminium was 0.8% lower at 19,055 yuan a ton, zinc declined 1.1% to 22,620 yuan, while tin added 0.9% to 250,480 yuan, nickel nudged 0.2% higher to 130,650 yuan.
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