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Recasts, adds details, updates prices
BEIJING, Feb 15 (Reuters) – Copper prices remained supported on Wednesday amid ongoing supply disruptions and demand hopes from top consumer China, but gains were limited due to the likelihood of a firm dollar under a higher-for-longer interest rate policy by the U.S. Federal Reserve.
Three-month copper on the London Metal Exchange CMCU3 climbed 0.3% to $8,975 a tonne by 0430 GMT.
Despite copper demand likely to remain subdued in the first quarter, a typically off-peak season, many participants believed to see a recovery from the second quarter.
“Prices are closely linked to consumption. Signs like increasing orders from end users for copper tubes and rods are something we are waiting to see,” said a Chinese futures trader.
China’s central bank ramped up medium-term liquidity injections as it rolled over maturing policy loans on Wednesday, while it kept the interest rate unchanged, matching market expectations.
The most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 was up 0.6% at 68,930 yuan ($10,072.18) a tonne.
Prices are likely to remain fluctuating in the following weeks, according to Nanhua Futures.
Many investors eyed more policy support from China’s “Two Session”, to be held in early March, while those who were bearish cited a likely stronger dollar. Should the dollar index =USD rise above 105, copper prices might retreat to 66,000 yuan, it added.
Meanwhile, production and logistics disruptions amid political unrest in copper-rich South American countries and extreme weather conditions in Indonesia have raised concerns in China.
The dollar found some support after stubbornly high U.S. inflation suggested interest rates are going to remain high for longer than investors had expected.
LME aluminium CMAL3 little changed at $2,407 a tonne, lead CMPB3 gained 0.2% to $2,099, tin CMSN3 held steady at $26,805, while zinc CMZN3 lost 0.4% down to $3,071.50.
SHFE aluminium SAFcv1 dipped 0.2% at 18,520 yuan a tonne, zinc SZNcv1 eased 0.2% to 23,010 yuan, lead SPBcv1 nudged 0.1% down to 15,250 yuan a tonne, tin SSNcv1 fell 2.2% to 212,300 yuan a tonne, while nickel SNIcv1 climbed 0.2% to 206,920 yuan a tonne.
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($1 = 6.8436 yuan)
(Reporting by Siyi Liu and Dominique Patton; Editing by Subhranshu Sahu and Janane Venkatraman)
((Siyi.Liu@thomsonreuters.com;))
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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