keywords :
Copper prices rebounded on Thursday, buoyed by a slide in the dollar and bets that China’s lacklustre metals demand will recover following its lifting of COVID-19 controls.
Three-month copper on the London Metal Exchange gained 1.3% to $9,005 a tonne by 1130 GMT after slipping by 0.4% in the previous session and touching a four-week low on Monday.
“The recovery after the Chinese New Year has definitely been weak, but I’m broadly bullish about the next few weeks for copper,” said Dan Smith, head of research at Amalgamated Metal Trading.
“When you think about the China macro story and the recovery after COVID and the Chinese New Year, you need to look at where we’ll be by the end of the month.”
Over the past 20 years, February has always been a strong month for copper prices, Smith added.
The most-traded copper contract on the Shanghai Futures Exchange , March, rose 0.7% to 68,640 yuan ($10,119.42) a tonne.
Economists surveyed by Reuters forecast that yuan loans by Chinese banks surged to a record high in January as the central bank moved to shore up growth in the world’s second-biggest economy.
“It is expected that the enthusiasm for downstream procurement will gradually pick up this week,” said Huatai Futures in a report.
With the record-high investment plan of State Grid Corp of China for 2023 and the strength of the automobile sector, the outlook for copper demand was positive, Huatai added. Both sectors are major users of copper.
Also boosting copper and other industrial metals was a weaker dollar index partly on views that inflation has peaked and the Federal Reserve will be able to slow rate hikes.
A softer U.S. currency makes dollar-priced metals cheaper to buyers using other currencies.
Among other metals, LME aluminium shed 0.6% to $2,466 a tonne, nickel dipped 0.1% to $27,360 and tin edged down 0.1% to $27,595, while zinc added 0.3% to $3,142.50 and lead climbed 1.1% to $2,144.50.