Copper hits 3-week high on China hopes, weaker dollar
LONDON — Copper prices touched their highest in more than three weeks on Friday due to a weaker dollar and hopes that demand will pick up in China on the back of new efforts to boost its troubled property sector.
The dollar index slipped after U.S. non-farm payrolls data showed that wage increases were less than expected even though the U.S. economy maintained a strong pace of job growth.
A weaker dollar makes commodities priced in the U.S. currency cheaper for buyers using other currencies.
Three-month copper on the London Metal Exchange (LME) climbed 1.2% to $8,475 a tonne by 1431 GMT after touching $8,540.50, the strongest since Dec. 14.
Economists and analysts believe that policymakers in China will take more steps to stimulate property demand this year, as part of Beijing’s overall goal to bolster its $17 trillion economy after a sharp COVID-induced downturn.
“There’s a fairly widespread view that commodities will rally by the end of the year, but the backdrop of demand being pretty weak at the moment makes things tricky,” said Dan Smith, head of research at Amalgamated Metals Trading.
“For the short term we remain bearish because there’s a lot of market choppiness we need to get through first.”
Copper hit its highest in nearly six months in mid-December on a weaker dollar but touched a two-month low on Wednesday amid worries about a potential global recession.
Copper also gained support from news that Chile, the world’s biggest copper producer, registered a 6.9% production fall in November to 449,000 tonnes.
Meanwhile, SHFE nickel extended losses, slumping by 6.1% to 210,200 yuan for its lowest since Dec. 7.
Traders said the drop was partly attributable to rising supply expectations after China’s Tsingshan Group, the world’s largest nickel producer, started its new nickel project.
LME nickel tumbled by 6.8% on Thursday, but recovered slightly on Friday, climbing 0.4% to $27,865 a tonne.
Among other metals, LME aluminum advanced 1.8% to $2,296 a tonne, zinc rose 0.2% to $3,010 and tin gained 2% to $25,287.50, but lead dipped 0.3% to $2,210.
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($1 = 6.8610 Chinese yuan) (Reporting by Eric Onstad Additionial reporting by Siyi Liu and Dominique Patton in Beijing Editing by David Goodman and Philippa Fletcher)
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