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By Mai Nguyen
Feb 21 (Reuters) – Copper prices in London fell on Tuesday as concerns over tepid consumption in top consumer China dented risk sentiment, even as traders and investors hope for a rebound in demand.
Three-month copper on the London Metal Exchange CMCU3 fell 0.7% to $9,077 a tonne by 0539 GMT, retreating from its highest in more than two weeks hit in the previous session.
The most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 rose 1% to 69,740 yuan a tonne, tracking overnight gain in London.
Hopes for a demand recovery in China post COVID-19 have supported prices, but some market participants now expect the rebound to kick in by March, disappointing those who had hoped for an early recovery in February.
“There was some demand improvement comparing with two weeks ago, but it has not yet to return to normal as the market is sensitive to (rising) copper prices,” said He Tianyu, a China copper analyst at CRU Group.
“Most people think (demand recovery will happen) in mid or late March, or early in the second quarter.”
Higher copper prices have also discouraged some downstream buyers to purchase the metal in large volume, and they are waiting for an economic rebound and supportive policy from the Chinese government to boost demand for their products.
LME copper prices leaped about 15% in the first two weeks of January, then lost about 9% within a month and have since been rangebound between $8,700 and $9,200.
Copper users will need time to adjust to higher prices, but will eventually have to accept it, He added.
LME aluminium CMAL3 dipped 0.5% to $2,446 a tonne, zinc CMZN3 fell 0.6% to $3,107 a tonne, lead CMPB3 shed 0.3% to $2,148.50 a tonne while tin CMSN3 rose 0.3% to 26,780 yuan a tonne.
ShFE aluminium SAFcv1 rose 0.4% to 18,730 yuan a tonne, nickel SNIcv1 advanced 3.8% to 209,790 yuan a tonne, tin SSNcv1 jumped 3.5% to 215,280 yuan a tonne, zinc SZNcv1 climbed 1.5% to 23,515 yuan a tonne and lead SPBcv1 rose 1.7% to 15,410 yuan a tonne.
China’s Yunnan province has asked aluminium producers to further cut their electricity usage amid a power supply crunch, potentially decreasing annual aluminium output capacity by about 740,000 tonnes, Shanghai Securities News said on Monday.
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(Reporting by Mai Nguyen in Hanoi Editing by Vinay Dwivedi)
((mai.nguyen@thomsonreuters.com; Reuters Messaging: mai.nguyen.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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