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Copper prices steadied on Monday as the market awaited Chinese loan data for indications of demand from the top metals consumer and U.S. inflation data for a steer on the timing of interest rate cuts and dollar direction.
Benchmark copper CMCU3 on the London Metal Exchange was up 0.3% at $8,606 a metric ton by 1120 GMT. Prices of the metal viewed as a gauge of economic health hit five-week highs of $8,689 a ton on Friday.
“Market is in wait mode for China data and U.S. consumer prices (on Tuesday),” one copper trader said, adding that there was some support for LME copper from lower stocks in LME approved warehouses.
China’s bank lending is expected to have pulled back sharply in February from a record high in January owing to seasonal factors. Included in the loan data are total social financing numbers, a key gauge of future metals consumption.
Signs of U.S. inflation coming under control could convince the U.S. Federal Reserve to cut interest rates sooner, which would weigh on the U.S. currency and make dollar-priced metals cheaper for buyers with other currencies.
This relationship with the dollar is used by funds that buy and sell on signals from numerical models.
Copper stocks MCUSTX-TOTAL in the LME system have dropped more than 30% to 110,850 tons since late December.
Partly offsetting that are copper stocks in warehouses monitored by the Shanghai Futures Exchange (ShFE) CU-STX-SGH, which have risen to 239,245 tons from levels near 30,000 at the start of the year.
Elsewhere, traders and funds’ reduced bets on lower nickel prices have pushed prices of the stainless steel material to $18,165 a ton, its highest since last November. It was last up 0.7% at $18,140.
Nickel prices have halted a two-year slide, boosted by expectations of narrowing surpluses.