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Copper prices rose on Thursday on hopes of further Chinese stimulus measures after investors assessed latest weak economic data, although sentiment was cautious ahead of U.S. inflation print that could guide movements in the dollar.
Three-month copper on the London Metal Exchange CMCU3 advanced 0.2% to $8,417.50 per metric ton by 0607 GMT, while the most-traded September copper contract on the Shanghai Futures Exchange SCFcv1 increased 0.4% to 68,480 yuan ($9,495.29) per metric ton.
Data on Wednesday showed China’s consumer sector fell into deflation and factory-gate prices extended declines in July, raising more pressure on Beijing to boost policy stimulus.
Still, gains in metals prices were limited as concerns over the weak demand in top metals consumer China and the lack of details on the stimulus measures created some uncertainty.
Traders and investors were also cautious ahead of crucial U.S. inflation data due later in the day that should guide the path for interest rates, which are linked to the outlook of the U.S. dollar.
LME aluminium CMAL3 rose 0.4% to $2,203 per metric ton, nickel CMNI3 eased 0.2% to $20,525, zinc CMZN3 was flat at $2,479.50, lead CMPB3 increased 0.3% to $2,132.50 and tin CMSN3 fell 1.1% to $26,970.
SHFE aluminium SAFcv1 rose 0.3% to 18,490 yuan per metric ton, nickel SNIcv1 fell 1% to 163,780 yuan, zinc SZNcv1 rose 1% to 20,895 yuan, lead SPBcv1 climbed 0.4% to 15,980 yuan and tin SSNcv1 dropped 1.4% to 222,130 yuan.
The tightness in LME tin has eased, with the cash contract trading at a $170-per-metric-ton discount to the three-month contract CMSN0-3, the biggest discount since March 15.
In zinc, the LME cash contract was at a $36.50 per metric ton premium to the three-month contract, the highest premium since Feb. 20 and indicating increasing tightness of nearby supplies.