Copper rises, but cloudy demand outlook limits gains

Copper rises, but cloudy demand outlook limits gains

16 Aug    Finance News

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Copper prices rose on Tuesday, tracking

the U.S. equities market on prospects of a less-aggressive

approach by the Federal Reserve, although gains were limited on

weak China data.

The most-traded September copper contract on the Shanghai

Futures Exchange rise 0.2% to 62,040 yuan ($9,129.84) a

tonne.

Three-month copper on the London Metal Exchange

dipped 0.3% to $7,952.50 a tonne, as of 0710 GMT, having risen

in most of the Asian trading hours to as much as 0.9%. The

contract dropped 2.8% in the previous session, the steepest

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daily decline in a month.

“The price movement is just in line with macro numbers, like

high yield debt in the United States and U.S. equity markets.

The only thing keeping it from moving higher in larger steps is

the weak China demand,” said a trader.

U.S. stocks rose on Monday, with growth shares extending a

recent rally, helped last week by signs that inflation may have

peaked in July.

Chinese regulators’ latest support in its property sector,

which consumes a vast amount of metals, also aided sentiment.

However, metals demand outlook remained tepid after China

reported poor economic data in July.

“I think we will have a small window for a relief rally

today until tomorrow, then soften for the rest of the week as

U.S. stocks take a breather from the recent rally and drag the

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rest of the risky assets down with it,” the trader said.

LME aluminum increased 0.6% to $2,423.50 a tonne,

zinc was up 0.8% at $3,593.50 a tonne, while lead

fell 0.3% to $2,171 a tonne.

ShFE aluminum declined 0.3% to 18,225 yuan a

tonne, nickel fell 1.9% to 173,600 yuan a tonne, lead

eased 0.4% to 15,040 yuan a tonne while zinc

rose 1.5% to 25,095 yuan a tonne.

Aluminum producer Henan Zhongfu Industrial said

they were suspending production this week as China’s Sichuan

province rationed industrial electricity consumption in its

worst heat wave in 60 years.

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or

($1 = 6.7953 yuan)

(Reporting by Mai Nguyen in Hanoi; Editing by Sherry

Jacob-Phillips)

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