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Copper prices on the London Metal Exchange (LME) reportedly dipped on Friday, pressured by a firmer dollar, but were on track to achieve a modest gain this year on healthy demand from China and hopes for United States (US) interest rate cuts.
Three-month copper on the LME was down 0.1 percent to $8,613 per tonne by 1130 GMT, according to Mining.com monitored by Zambia Monitor on Saturday.
It reported that LME copper had gained 2.8 percent this year, partly reversing a decline of 13.9 percent in 2022.
Analysts stated that investors were divided on the outlook for 2024, with bulls highlighting the prospect for further stimulus in top metals consumer China, demand from the green transition plus the hope of rate cuts as inflation subsides.
Others are more cautious due to weak economic growth which may cause recessions in some nations.
“It would seem the global economy is due to slow down even further in the first half of 2024 which means the bullish story for metals that some are putting out may have to wait a while,” said Malcolm Freeman, Chief Executive Officer at Kingdom Futures.
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In China, however, it stated that copper demand climbed 3.2 percent this year after the country dropped its zero-Covid policy, according to analysts at brokerage China Futures.
“The annual growth will moderate to 2.8 percent in 2024, as housing sector remains sluggish but partly offset by increasing investment in power grid, strong solar and wind power sectors, they added.
Copper is widely used in power, construction and transportation sectors.
The market was also said to have underpinned by a tighter supply outlook of copper concentrate amid mine closures and disruptions, highlighted by the move by China’s top copper smelters on Thursday to lower their first-quarter guidance for copper charges.
“Weighing on metals was a firmer dollar index, making commodities priced in the US currency more expensive for buyers using other currencies.”
On the other hand LME nickel fell 1.3 percent to US$16,515 a tonne after LME inventories hit fresh 18-month highs, having surged by 38 percent this month, highlighting excess supply.
Copper prices dip on the back of a strong dollar, but demand stays stable, with Chinese order.
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