keywords :
Copper prices rose to one-week highs on Monday ahead of a key political meeting in China which could pave the way for growth stimulus, but gains were capped by persistent fears of stalling demand in the top consumer.
Benchmark copper prices CMCU3 on the London Metal Exchange (LME) traded up 0.2% at $8,525 a metric ton in official rings.Prices of the metal used in the power and construction industries earlier hit $8,569.5, the highest since Feb. 23.
China’s parliament meets on Tuesday. A property crisis, deepening deflation, a stock market rout and mounting local government debt woes have pressured China’s leaders and all eyes are on plans to support economic activity.
“Focus is on the meeting in China and whether they will come up with anything big in the way of stimulus,” a metals trader said, adding that the softer dollar was a positive.
A falling U.S. currency makes dollar-priced metals cheaper for holders of other currencies, which would boost demand.
China accounts for about half of global copper consumption, which analysts say was supported last year by healthy demand due to investment in the country’s electricity grid and orders from the electric vehicle and solar sectors.
“China’s build out of solar capacity will not be as significant this year and construction looks like it is going to remain weak. I don’t see copper demand growth in China as strong as last year,” BNP analyst David Wilson said.
Also weighing are higher warehouse stocks monitored by the Shanghai Futures Exchange. At one-year highs of 214,487 tons, they are up more than 300% since late January.
In other metals, lead stocks in LME registered warehouses at 183,100 tons MPBSTX-TOTAL have climbed 65% since late January, weighing on near-term prices of the battery material.
A premium for the cash over the three-month MPB0-3 contract has recently reversed into a discount.
Three-month lead CMPB3 was up 0.3% at $2,040 a ton.
In other metals, aluminium CMAL3 was down 0.9% at $2,225.5, zinc CMZN3 gained 0.8% to $2,436, tin CMSN3 advanced 1.2% to $26,820 and nickel added 0.8% to $17,800.