METALS-London copper rises from 5-week low as China hope supports

Updates prices, adds quotes

Feb 16 (Reuters) – Copper prices in London rebounded from a five-week low on Thursday as hopes for a demand recovery in top consumer China offset negative effect from a stronger dollar.

Three-month copper on the London Metal Exchange CMCU3 rose 0.6% to $8,909 a tonne by 0530 GMT, while aluminium CMAL3 increased 0.6% to $2,398.50 a tonne, zinc CMZN3 advanced 0.5% to $3,032.50 a tonne and lead CMPB3 was up 0.5% to $2,062.50 a tonne.

LME copper hit a five-week low on Wednesday as fears of further interest rate hikes boosted the dollar, making greenback-priced metals more expensive to holders of other currencies.

While actual copper demand remained tepid, prices were supported by hopes that consumption of the metal will eventually rebound in China after the country removed harsh COVID-19 restrictions.

“The demand is bad but the outlook is good. People are just hoping for a recovery in March. The drop yesterday was too much, so there was some adjustment today,” said a metals trader, expecting prices to continue to trade sideway until March.

In early signs of recovery in China, new home prices there rose in January for the first time in a year, as the end of the zero-COVID regime, favourable property policies and market expectations for more stimulus measures boosted demand.

The property sector accounts for a vast portion of metals demand.

However, market participants were still hoping for more stimulus programmes from the Chinese government targeting metals-heavy industries.

The most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 fell 0.5% to 68,520 yuan ($10,003.65) a tonne, nickel SNIcv1 dropped 1.4% to 204,250 yuan a tonne, zinc SZNcv1 shed 1% to 22,880 yuan a tonne.

SHFE aluminium SAFcv1 edged up 0.1% to 18,510 yuan a tonne and tin SSNcv1 increased 0.2% to 213,330 yuan a tonne, while lead SPBcv1 fell 0.4% to 15,160 yuan a tonne.

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($1 = 6.8495 yuan)

(Reporting by Mai Nguyen in Hanoi; Editing by Savio D’Souza and Uttaresh.V)

((mai.nguyen@thomsonreuters.com; Reuters Messaging: mai.nguyen.thomsonreuters.com@reuters.net))

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