LONDON: Copper prices rose in volatile trade on Monday, supported by a weaker dollar and signs of improving demand from top consumer China.

Benchmark copper on the London Metal Exchange (LME) was up 1% at $8,665.0 a tonne by 1051 GMT, having fallen by 3.2% last week.

Banking stocks and bonds plunged on Monday as the hit to investors from UBS Group’s state-backed takeover of Credit Suisse fanned concern over the health of the global banking industry.

“The market is trying to absorb what it all means for the metals sector,” said WisdomTree commodity strategist Nitesh Shah.

“Metals markets are very sensitive for macroeconomic trends, and everything that happened in the banking sector could cause a slowdown in economic activity.”

Copper rises but still faces weekly loss

Major central banks, faced with the risk of a fast-moving loss of confidence in the stability of the financial system, moved on Sunday to bolster the flow of cash around the world.

The U.S. dollar index fell on Monday, making copper more attractive to buyers holding other currencies.

In China, the world’s largest consumer of the metal widely used in electrical wiring and construction, the Yangshan copper premium rose to its highest since December, indicating improving appetite for imported copper.

SHFE copper inventories fell for a third straight week to 182,341 tonnes, their lowest since Jan. 20.

LME aluminium was up 0.1% at $2,277 a tonne. China’s aluminium imports in the first two months of 2023 rose 11.3% year on year to 374,321 tonnes as buyers anticipated improving demand for the metal.

Zinc rose by 0.1% to $2,896.5 a tonne, nickel lost 0.7% to $23,210, lead was flat at $2,089 and tin gained 0.2% to $22,550.