LONDON: Copper prices in London were little changed on Tuesday, rebounding from early declines as the dollar pared gains and balanced pressure from weak service sector data out of top metals consumer China.
Benchmark copper on the London Metal Exchange (LME) was flat at $8,451 a metric ton at 1342 GMT.
The metal used widely in the power and construction is down 0.5% so far this week, with prices having swung on Chinese measures to support its property market and subsequent uncertainty over the impact they will have on metals demand.
“Metals prices are paring gains made on the back of stimulus measures by Beijing to turn around the flagging property market that were announced last week,” said ING commodities strategist Ewa Manthey.
“The market will be now assessing how these recent measures will feed through to real estate activity and how supportive they will be for metals demand.”
China’s services activity expanded at the slowest pace for eight months in August, a private-sector survey showed on Tuesday, as weak demand continued to dog the world’s second-largest economy and stimulus failed to spark a significant revival in consumption.
“Until the market sees sustainable recovery in China, we will struggle to see a fundamental move higher for metals,” Manthey said.
The dollar index was up 0.5% after hitting a six-month high after weak global activity data. In the euro zone, the decline in business activity accelerated faster than initially thought last month.
A stronger U.S. currency makes dollar-priced metals more expensive for buyers holding other currencies.
In other metals, LME aluminium shed 0.8% to $2,195.5 a ton in official activity, zinc rose 0.1% to $2,483, nickel added 0.1% to $21,050 and lead firmed by 0.3% to $2,229 while tin lost 0.1% to $26,360.