Copper Prices Steady amid Chinese Holiday, Await US Inflation Data – Reuters, China

Date:

Updated: 6:48 PM, Mon February 12, 2024

LONDON – Copper prices remained stable on Monday as trading volumes remained subdued due to the Chinese Lunar New Year holiday. Investors are awaiting US inflation data, which could provide insight into potential interest rate cuts by the Federal Reserve.

At 1019 GMT, benchmark copper on the London Metal Exchange (LME) was up 0.1% at $8,176 per metric ton. Concerns regarding the demand outlook in China, the top consumer of copper, caused prices to reach three-month lows of $8,127 last week.

The market remains cautious amid the absence of Chinese buyers due to the ongoing holiday. A copper trader stated, It’s quiet because of the Chinese holiday, people are still nervous about Chinese demand. What happens to the dollar this week will be very important in China’s absence.

The direction of U.S. interest rates could be influenced by the US consumer prices data due this week. A potential interest rate cut could result in a weaker dollar, making dollar-priced metals more affordable and potentially boosting demand.

The broader industrial metals sector is expected to face pressure due to concerns over China’s property industry, which is beginning to affect global markets. An industry note from broker Marex highlighted that real estate fears, initially concentrated in China, are now spreading to the U.S., impacting companies such as New York Community Bancorp due to their exposure to commercial property.

Meanwhile, zinc fell to its lowest level since August last year, trading at $2,278 a ton, due to surplus supplies. Zinc is widely used in galvanizing steel, a key material for construction, which has witnessed a slowdown in activity recently. The presence of higher zinc stocks in LME-registered warehouses indicates the surplus in the market. However, zinc managed to recover slightly, gaining 1% to $2,323 a ton.

In other metals, aluminum slipped 0.2% to $2,212, lead rose 0.9% to $2,050, tin increased 1.6% to $26,800, and nickel advanced 0.6% to $16,020.

As the week progresses, market participants will closely monitor the US inflation data and its potential impact on interest rates. Additionally, the influence of China’s property sector on global markets remains a significant concern for the industrial metals industry.

Frequently Asked Questions (FAQs) Related to the Above News

Why did copper prices remain stable on Monday?

Copper prices remained stable on Monday due to trading volumes being subdued during the Chinese Lunar New Year holiday.

What is the status of copper prices currently?

At 1019 GMT, benchmark copper on the London Metal Exchange (LME) was up 0.1% at $8,176 per metric ton.

What caused concerns about copper demand?

Concerns about copper demand arose due to the outlook in China, the top consumer of copper, resulting in prices reaching three-month lows of $8,127 last week.

Why is the market cautious during the Chinese holiday?

The market is cautious during the Chinese holiday due to the absence of Chinese buyers, which has an impact on copper demand.

How could US inflation data impact copper prices?

US inflation data could impact copper prices by providing insights into potential interest rate cuts by the Federal Reserve. A potential interest rate cut could result in a weaker dollar, making dollar-priced metals more affordable and potentially boosting demand.

What is causing pressure on the broader industrial metals sector?

The broader industrial metals sector is facing pressure due to concerns about China's property industry, which is beginning to affect global markets.

What is the current status of zinc prices?

Zinc prices fell to their lowest level since August last year, trading at $2,278 per ton, due to surplus supplies. However, zinc managed to recover slightly, gaining 1% to $2,323 per ton.

What is the overall situation of other metals?

Aluminum slipped 0.2% to $2,212, lead rose 0.9% to $2,050, tin increased 1.6% to $26,800, and nickel advanced 0.6% to $16,020.

What will market participants be monitoring this week?

Market participants will closely monitor the US inflation data and its potential impact on interest rates. Additionally, the influence of China's property sector on global markets remains a significant concern for the industrial metals industry.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

Shreya Gupta
Shreya Gupta
Shreya Gupta is an insightful author at The Reportify who dives into the realm of business. With a keen understanding of industry trends, market developments, and entrepreneurship, Shreya brings you the latest news and analysis in the Business She can be reached at shreya@thereportify.com for any inquiries or further information.

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