Copper edges off 2-week low as dollar supports

MELBOURNE — London copper edged away from its lowest in a fortnight on Monday but remained not far from a four-year high, as traders filtered back from holidays and adjusted to a softer dollar and resilient Chinese demand.

London Metal Exchange (LME) copper traded at $7,130 a ton by 0223 GMT, up a modest 0.10% from Friday, when prices corrected to the lowest in two weeks at $7,107. Prices on Dec. 28 topped out at $7,312.50 a ton, the highest since Jan 2014.

Shanghai Futures Exchange ( SHFE) copper traded down 0.90% at 54,570 yuan ($8,428) a ton, having reached the lowest since Dec. 25.

Coal and iron ore dominated mining takeovers in 2017, Thomson Reuters data shows, with buyers favoring the heavily polluting devil they know over the uncertainties of a battery-powered future.

Data in the week ahead will enable investors to gauge the strength of German and British industry, US spending and Chinese trade at the end of last year — and the first hints on the strength of economic activity at the start of 2018.

LME cash zinc is trading at a $26 premium to the benchmark contract up from a $10 discount on Dec. 12. Traders suggested the backwardation has encouraged deliveries into SHFE warehouses, where stocks have climbed around 10,000 tons since late December.

A very big short position holder has emerged in lead futures, at 20-29% of outstanding positions for February, rising to 30%- 39% for March. There is also a significant holder of lead warrants, holding 40%- 50% of LME stocks, which suggests an impending tussle.

Federal Reserve Bank of Cleveland President Loretta Mester said on Friday she expects four interest- rate hikes this year, as US economic growth picks up and unemployment remains low.

A blizzard of data in coming weeks is expected to show China’s economy ended a strong 2017 on a slightly softer note, but activity has likely remained more resilient than expected despite a punishing crackdown on industrial pollution and a cooling property market. —