Copper prices steady

COPPER futures ended higher after United States dollar tumbled to multiweek lows following strong labour market data.

Data showed initial filings for unemployment insurance declined last week to their lowest levels since the outbreak of the corona-virus pandemic.

Three-month copper on the London Metal Exchange was up 0.6 percent at US$9,433.50 a tonne , while the mosttraded October copper contract on the Shanghai Futures Exchange rose one percent to US$10,760.35 a tonne.

This is after copper prices fell more than two percent on Wednesday as data showed that factory activity slowed in August across swathes of Europe and Asia.

In China, according to Mining.Com magazine, manufacturing contracted for the first time in nearly 1-1/2 years.

Copper for delivery in December fell 2.3 percent from Tuesday’s settlement price, touching US$4.275 per pound (US$9,405 per tonne) on the Comex market in New York.

“The state reserves administration in China also released 150,000 tonnes of copper, aluminium and zinc into the market, on the third round of metal auctions that helped to cool the rally in copper prices,” the magazine stated.

Prices are still up 20 percent this year after rising 26 percent in 2020, with analysts optimistic that demand for the metal used in power grids will increase as the world races toward electrification.

Fundamentals have improved in recent weeks, said Citi analyst Oliver Nugent, pointing to falling exchange stockpiles, higher Chinese import premiums, lower speculative positioning and expectations for more economic stimulus.

“Fundamentally we think we’re at the right levels. We see copper a little above US$9,000 on average next year,” he said.