Copper edges higher despite persistent macro headwinds
CPER•Copper rose after a sharp selloff, with LME copper up 0.34% to $14,461.50 a ton and Shanghai copper up 0.09% to 109,530 yuan. A strong dollar, elevated oil prices and concerns about Chinese demand limited bullish sentiment.
1. Copper prices recover
Benchmark three-month copper on the London Metal Exchange rose 0.34% to $14,461.50 a metric ton, while the most-traded Shanghai Futures Exchange contract gained 0.09% to 109,530 yuan ($16,335.08) by 0332 GMT. LME copper fell 1.4% on Monday, touching its lowest in more than ten days after weak Chinese industrial profits data added to pressure from rising oil prices and a stronger dollar.
2. China demand concerns
Traders are awaiting China’s manufacturing purchasing managers data due later this week. Restocking ahead of the seven-day National Day holiday, set to begin Thursday, is slowing. Chinese broker Galaxy Futures analysts said downstream copper users had largely completed pre-holiday restocking and were buying only as needed after the recent price decline.
3. Oil and rates weigh
Brent crude hovered above $106 a barrel, while the dollar index stayed near a two-month high, supported by rising Treasury yields. Higher oil prices have strengthened inflation concerns and expectations that U.S. interest rates could stay higher for longer; markets priced in more than a 70% chance of another Federal Reserve rate increase in October.
