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By Eric Onstad
LONDON, Feb 16 (Reuters) – Copper prices bounced on Thursday from the lowest levels in five weeks as the dollar weakened and investors looked ahead to an expected revival in demand in top metals consumer China.
Three-month copper on the London Metal Exchange CMCU3 rose 1% to $8,947.50 a tonne by 1110 GMT after sinking 1% on Wednesday and touching the weakest since Jan. 10.
The dismantling of strict COVID-19 controls in China sent copper surging last month to a seven-month peak, while investors took heart on Thursday from data showing China’s rose in January for the first time in a year.
The property sector accounts for significant metals demand.
“There’s high-level data showing that things are beginning to stir in China, but when it comes to infrastructure and construction, it will take a bit more time,” said independent consultant Robin Bhar.
“There’s good dip buying around to support the underside. People are taking the opportunity to build longs, whether tactically as we go into Q2 or strategically because of the green energy transition.”
Also supporting metals was a weaker dollar index =USD as investors scooped up higher-risk currencies, making commodities priced in the U.S. currency less expensive for buyers using other currencies. FRX/
The most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 fell 0.5% to 68,510 yuan ($9,989.36) a tonne.
“The demand is bad but the outlook is good. People are just hoping for a recovery in March,” said a metals trader, expecting prices to continue to trade sideways until March.
In other metals, LME aluminium CMAL3 dipped 0.1% to $2,383 a tonne, zinc CMZN3 shed 0.2% to $3,012.50, lead CMPB3 eased 0.2% to $2,048, while nickel CMNI3 was little changed at $26,140 and tin CMSN3 added 0.1% to $26,685.
For the top stories in metals and other news, click TOP/MTL
($1 = 6.8583 yuan)
(Reporting by Eric Onstad; Additional reporting by Mai Nguyen in Hanoi; Editing by Shounak Dasgupta)
((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.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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