Fund buying helps copper offset losses triggered by falling crude, equities

LONDON — Copper prices rose on Monday, reversing earlier losses as funds bought base metals on the back of a weaker dollar and offset the selling triggered by tumbling oil and global equities.

Benchmark copper on the London Metal Exchange (LME) ended up 0.4% at $ 4,827 a ton from an earlier session low of $4,758.

“Copper wasn’t hammered like oil and stocks earlier today, that’s a positive sign,” a copper trader said.

A lower US currency makes dollar- denominated metals cheaper for non- US firms; a relationship used by funds to generate buy- and- sell signals from numerical models.

Lack of a deal to cap oil output after a meeting of major crude exporters in Qatar last weekend hit oil prices and undermined investor confidence in equity markets.

“The market looks robust in the face of the oil market,” said Commerzbank analyst Eugen Weinberg.

“Confirmation of stronger demand going forward and sluggish supply will help prices stabilize.”

Heavy rains in Chile, prompting Anglo American and stateowned producer Codelco to suspend operations temporarily at two copper mines with combined annual capacity of 880,000 tons, are supporting prices for now.

However, the stoppages would have to be prolonged and spread to other parts of Chile for supplies to be severely curtailed.

Prices of copper, used widely in power and construction, rose more than 3% last week on expectations of stronger demand after encouraging Chinese industrial production, loans and investment data.

Copper’s response remained muted, however, with Barclays attributing that partly to concern that the recent turn in Chinese data is ultimately unsustainable and that a repeat of 2015 will occur, with a stabilization in the first half giving way to weaker demand in the second half.

Three-month aluminum rose 0.9% to $1,570 a ton.

Zinc closed up 1.9% at $1,894 from an earlier $1,917, its highest since early August. It is up about 18% so far this year on expectations of shortages.

Traders said the break above $ 1,900 bodes well for zinc, but that Fibonacci resistance at around $1,925 may need several attempts to overcome.

Lead slipped 0.1% to $1,714 and tin was bid down 0.6% to $17,055.

Nickel rose 2.6% to $9,150 a ton from an earlier $9,150, its highest in more than a month. —