Copper recovers but global growth concerns cap gains

26th April 2023 By: Reuters

LONDON - Copper prices rose in London on Wednesday as support from a weaker dollar helped to halt its five-session run of declines.

Benchmark LME copper was up 0.6% at $8 574.5/t by 10:56 GMT.

The metal used in electrical wiring fell to its lowest in six weeks on Tuesday, testing robust support near $8 500/t on weak demand from leading metals consumer China.

"Copper looks set to benefit from increased green transformation demand in the coming years. However, there is still slower than expected recovery in Chinese demand during a time that is meant to be the busiest construction period of the year," said Saxo Bank strategist Ole Hansen.

Concern is also mounting over global economic growth, with a plunge in US consumer confidence, he added.

China's cabinet on Tuesday issued a plan to stabilise its trade sector as subdued global demand threatens its exports outlook.

On-warrant copper stocks in LME-registered warehouses rose by 2 750 t to 59 775 t on Wednesday to reach their highest since January 13. 

The dollar index, making dollar-denominated metals more attractive to buyers holding other currencies, while emerging market shares rose after six days of losses.

While all other base metals prices rose, tin prices fell by 0.1% to $25 550/t as a market surplus and high inventories continued to wipe off most of the recent gains caused by plans by Myanmar's Wa militia to suspend mining in areas it controls.

LME aluminium was up 0.4% at $2 344/t despite an inflow of metal into LME-registered warehouses while zinc gained 0.9% to $2 622, lead rose 0.2% to $2 110 and nickel was up 1.1% at $23 585.

Surplus in the nickel market is expected to widen this year, the International Nickel Study Group said on Tuesday.