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LONDON: Copper fell for a fourth day on Tuesday as the slow progress of U.S. stimulus measures, a stronger dollar and concerns about demand from top consumer China sucked momentum from a rally that lifted prices to eight-year highs earlier this month.
China, whose copper consumption has driven the rally, is gearing up for a week-long New Year holiday in February while battling a coronavirus outbreak and tightening liquidity in the lending market.
Benchmark copper on the London Metal Exchange (LME) was down 0.5% at $7,927 a tonne at 1047 GMT after reaching $8,238 on Jan. 8. The metal used in power and construction rose 26% in 2020 and is up 2% so far this year.
“Some market players may be taking profits or waiting for new impetus,” said Commerzbank analyst Daniel Briesemann, adding that Chinese demand typically rises after its New Year celebrations and this could lift prices.
But China’s demand overall will weaken in 2021 because it imported more copper last year than it needed, he said, predicting prices around $7,000-$7,500 by year-end.
GLOBAL MARKETS: Asian stocks fell as concerns about the delivery of a $1.9 trillion U.S. stimulus package weighed on sentiment. The dollar strengthened, making metals costlier for buyers outside the United States.
CHINA MARKETS: China’s blue-chip stock index suffered its biggest daily loss since September as short-term borrowing rates jumped to pre-COVID levels.
FACTORIES: COVID-19 outbreaks in northern China will not lead to manufacturing shutdowns, an official said.
TIN: Benchmark tin was up 1.1% at $22,700 a tonne after reaching $22,730, its highest since 2014. Tin is in its 13th straight week of gains as stockpiles in LME-registered warehouses near record lows. MSNSTX-TOTAL
ALUMINIUM: LME alumininum was 0.3% higher at $2,018 a tonne as the premium for cash metal over the three-month contract rose to aroun $7, the most since December 2019, pointing to tight nearby supply. MAL0-3
ZINC: Zinc was down 1.5% at $2,666 a tonne after inventories in LME-registered warehouses leaped 24% to 235,025 tonnes, the most since September 2018. MZNSTX-TOTAL
OTHER METALS: Nickel was down 0.5% at $18,155 a tonne and lead was 0.1% higher at $2,049.50.