Copper prices dip as doubts over China demand linger

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Copper prices dipped on Tuesday as traders exercised caution after physical demand in China, the world’s biggest consumer of metals, remained stagnant following a week-long holiday.

Three-month copper on the London Metal Exchange was down 0.2% at $9,195 a tonne by 0301 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange dipped 0.2% to 69,570 yuan ($10,301.02) a tonne.

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Both copper contracts, however, are still set for a monthly gain, backed by a weaker U.S. dollar, rising inflows from funds and hopes that Chinese demand for the metal will improve following the removal of its strict COVID-19 restrictions.

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China’s manufacturing activity swung back to growth in January, beating expectations, as a wave of COVID-19 infections passed through the country faster than expected.

LME aluminum fell 0.8% to $2,570 a tonne, zinc declined 0.3% to $3,435.50 a tonne, tin shed 1.4% to $29,400 a tonne while lead rose 0.4% to $2,169 a tonne.

SHFE aluminum eased 0.8% to 18,920 yuan a tonne, tin declined 1.4% to 235,390 yuan a tonne, lead eased 0.3% to 15,245 yuan a tonne while zinc rose 0.8% to 24,480 yuan a tonne.

SHFE nickel was up 1.2% at 221,930 yuan a tonne. Earlier in the session, it hit 223,290 yuan a tonne, its highest in 3-1/2 weeks, after Bloomberg reported that the Philippines may tax nickel exports.

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DATA/EVENTS (GMT)

0630 France GDP Preliminary Q4

0745 France CPI (EU Norm) Prelim YY Jan

0745 France Producer Prices YY Dec

0855 Germany Unemployment Chg SA Jan

0855 Germany Unemployment Rate SA Jan

0100 EU GDP Flash Prelim Q4

0900 Germany CPI Prelim YY Jan

0900 Germany HICP Prelim YY Jan

— US Federal Reserve’s FOMC starts its two-day

meeting on interest rates

($1 = 6.7537 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips)