Copper and other industrial metals prices rose on Wednesday. After data from China showed manufacturing activity increased in February at the fastest pace in more than a decade.
* Also contributing to the rise was a decline in the dollar. Particularly against the yuan, which made metals priced in the greenback cheaper for buyers with other currencies.
* At 1737 GMT, benchmark copper on the London Metal Exchange (LME) was up 1.8 per cent at $9,124 a tonne.
Strong Chinese manufacturing data boosts industrial metals
* Copper touched a seven-month high of 9,550.50 dollars in January. Hopes that Chinese demand would pick up after the country abandoned controls by COVID-19.
* However, prices for the metal used in energy and construction lost momentum around. The Chinese New Year as demand failed to pick up. The metal piled up in Chinese warehouses and the dollar strengthened.
* „Today’s figure gives me more conviction that China is going to be. A positive force (for demand),” said Nitesh Shah, analyst at WisdomTree.
Strong Chinese manufacturing data boosts industrial metals
* Analysts at JPMorgan (NYSE:JPM) said they remain subdue on the outlook for demand growth. As the drivers of China’s overall economic rebound this year are driven more by consumption than metal-intensive investment.”
* The bank expects copper prices to end this year at around $9,100 a tonne. Before rising above $10,000 in 2024 and averaging $9,850 next year.
* In other base metals, aluminium on the LME was up 2.7 per cent at $2,436 a tonne; zinc soared 4.4 per cent to $3,131; nickel advanced 0.6 per cent to $24,935; lead improved 1.4 per cent to $2,133; and tin climbed 1.1 per cent to $25,225.
Copper prices extended their rally on Tuesday as speculators adjusted positions on hopes of a revival in demand in China, the world’s top metal consumer.
At 1130 GMT, three-month copper on the London Metal Exchange was up 0.6 per cent at $8,856 a tonne, after gaining 1 per cent on Monday. However, the contract gave up 4.5 per cent month-on-month, its first decline since October.
The most-traded April copper contract on the Shanghai Futures. Exchange rose 0.5 per cent to 69,050 yuan ($9,950.57) a tonne, but was also down on the month.
LME copper bounced from an important level for investors watching for technical signals. Said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The gains are due to profit-taking by speculators who had taken short positions. As well as new long positions by investors taking advantage of a cheaper level to enter the market, he adde.
LME copper has retreated seven per cent since hitting a seven-month high in January of $9,550.50 a tonne. Having risen largely on hopes that the relaxation of China’s strict COVID-19-related controls would boost demand.
Copper demand in China remained weak in February, weighing on prices. While the stronger dollar also made the metal priced in the US currency more expensive for holders of other currencies.
Analysts expect the Chinese economy to recover strongly from March, as the government is likely to roll out more stimulus at the National People’s Congress.
