Copper set for weekly gain on China demand, recession fears linger


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BEIJING — Copper rose on Friday and was headed for a weekly gain, driven by a weaker dollar and expectations of higher demand from top consumer China, though lingering concerns about a global recession weighed on investor sentiment and capped gains.

Three-month copper on the London Metal Exchange was up 0.9% at $9,384.50 a tonne by 0809 GMT, taking its gains to 2.2% for this week and 12.8% for the month so far.

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The most-traded March copper contract on the Shanghai Futures Exchange closed at 70,420 yuan ($10,399.47) a tonne with a weekly gain of 2.3%.

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Investors bet on a strong recovery in physical demand after the Chinese New Year, while the dollar index hovered around a seven-month low, making the greenback-priced commodity more attractive for those holding other currencies.

“For now, onshore physicals are soft, copper demand is still 10% lower year on year and import arbitrage is negative,” said Zerlina Zeng, a senior research analyst at CreditSights, a subsidiary of Fitch Solutions.

“But onshore traders are turning more positive on China’s macro outlook, which supported the relatively strong import flows of copper based on customs imports cleared via Shanghai.”

Data on Thursday showed the U.S. job market remained tight, reinforcing concerns that Federal Reserve would stick to its aggressive interest rate policy that could lead the economy into a recession.

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SHFE copper inventories jumped 36.6% to 139,967 tonnes on Friday.

The exchange will remain closed for trading on Friday evening and next week because of the Lunar New Year holidays.

CITIC Futures noted the strong production among smelters this month and the still weak consumption could result a higher-than-normal inventories build-up during the holiday, reaching as high as 300,000 tonnes.

Among other metals, LME aluminum rose 1.2% to $2,618.50 a tonne, zinc slid 0.6% to $3,438, tin advanced 1.7% to $29,300, and lead shed 0.2% to $2,138.

SHFE nickel rose 5.5% to 223,130 yuan a tonne, aluminum added 2.1% to 19,465 yuan, lead fell 0.7% to 15,190 yuan, zinc climbed 1.6% to 24,765 yuan, and tin was up 3.8% to 238,960 yuan a tonne.

For the top stories in metals and other news, click or ($1 = 6.7715 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Eileen Soreng, Savio D’Souza and Rashmi Aich)


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