China central bank holds key policy rates steady as LME copper weakens

LONDON — Copper prices slipped on Monday after China’s central bank held key policy rates on medium-term loans steady and the market focused on the country’s ailing property market, but falling inventories contained losses.

Traders said volumes were muted due to a US holiday.

Benchmark copper on the London Metal Exchange (LME) was down 0.6% at $8,442 per metric ton at 1707 GMT. Prices of the metal used in power and construction hit a twoweek high of $8,499.50 on Friday as funds and traders cut bets on lower prices due to a break of key technical resistance levels.

With China’s return from the Lunar New year holiday week, traders and analysts will be looking for clues to demand over the next couple of months, typically a seasonally strong period ahead of the construction season in the summer.

Short-term trading though will be impacted by the US Federal Reserve’s interest rate decisions and their impact on the US currency which when it rises makes dollar-priced metals more expensive for holders of other currencies. Copper stocks in LME registered warehouses at 128,300 have dropped nearly 25% since late December and are at their lowest since September 2023.

Outflows have also helped narrow the discount for the cash over the three-month copper contract which hit a record high above $110 a ton earlier in February.

Three-month zinc was up 0.9% at $2,406 a ton.

In other metals, aluminum retreated 0.8% to $2,201; lead slid 1.1% to $2,041; tin fell 2% to $26,430; and nickel rose 0.3% to $16,410.