Copper prices edge up on bargain hunt after sliding to one-month lows
LONDON — Copper edged higher on Tuesday as buyers picked up bargains after the previous session’s slide to four-week lows, reassured by a pause in this month’s sharp rise in London Metal Exchange (LME)registered inventories of the metal.
Prices rallied sharply after Donald Trump’s victory in the US presidential election, on hopes that his commitment to infrastructure spending would lead to higher demand for the metal.
Those gains dissipated in early December, however.
A surge in stockpiles, reflecting weaker demand in China towards year- end, helped knock nearly $ 100 a ton off its late November highs, before it found a floor around current levels.
LME copper closed up 0.10% at $5,502 a ton. On Monday it fell to its lowest level in four weeks, at $5,475 a ton.
“Copper benefited a lot from this euphoria that spread after the US elections,” Julius Baer Analyst Carsten Menke said.
“The market got a bit ahead of itself. This is more of a sober assessment of what the real world looks like,” he added.
“Looking into next year, we see more downside for copper.”
Copper prices have slipped 5.50% so far this month, eroding a 20% rally in November that helped break a three-year run of losses this year.
A 1,450- ton dip in copper stocks on Monday, which had surged 62% or about 130,000 tons in the previous nine days to a two-month high, helped arrest its fall.
With investor positions on the Chicago Mercantile Exchange at record highs on the prospects of Mr. Trump boosting the US economy by spending on infrastructure, while China’s economic recovery gains ground and a supply surge fades, some investors were using the pullback to buy, a trader said.
OTHER INDUSTRIAL METALS
Zinc and lead, two of this year’s best performing metals, recovered some lost ground after falling as much as 5% in the previous session. Lead closed up 1.20% at $2,195 a ton, while zinc ended 1.1% higher at $2,637 per ton (/t).
“After extremely strong zinc prices have been seen in recent months, we have to upgrade the near-term forecast to expect $2,590/t in Q4, and a range of $2,600-3,000/t in 2017,” Macquarie said in a note.
LME aluminum closed up 0.70% at $1,721 a ton, while nickel was 0.40% higher at $ 10,925 a ton and tin ended 1.30% lower at $20,920. —