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Copper prices extended gains to hit three-week highs on Thursday on hopes for a halt in U.S. rate hikes after inflation slowed, but weak export data in top metals consumer China put a damper on the gains.
Benchmark three-month copper on the London Metal Exchange CMCU3 rose 1% to $8,585 per metric ton in official open-outcry trading, after touching its strongest since June 22 at $8,607.50.
LME copper jumped 2.1% on Wednesday after surprisingly slow U.S. inflation signalled that interest rate hikes could potentially finish by the end of the month.
“Risk appetite received quite a boost from the weaker than expected CPI, but copper looks like it’s lacking energy to push much higher at this point,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“China’s exports are not having a good time and that reflects that the global economy is still somewhat in a soft spot. And additional stimulus in China may not be forthcoming this quarter, we may have to wait for the fourth quarter.”
Data on Thursday showed that China’s exports fell last month at their fastest pace since the onset three years ago of the COVID-19 pandemic, as an ailing global economy puts mounting pressure on Chinese policymakers for fresh stimulus measures.
The dollar eased on Thursday, having posted its worst fall in five months in the previous session.A weaker dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies.
The most-traded August copper contract on the Shanghai Futures Exchange SCFcv1 ended 1.3% higher at 68,610 yuan ($9,578.39) per metric ton, having hit its highest since June 21 earlier in the session at 68,710 yuan.
Strong domestic production and weak demand restrained copper imports in top consumer China, data from the General Administration of Customs showed.