Copper extended gains in Asian trading hours on Tuesday as a deal to buy the assets of stricken US lender Silicon Valley Bank (SVB) spurred risk appetite, while a weaker dollar also lent support to the metal, which is priced in the US currency.
The overall mood, however, remained subdued amid worries about a credit crunch that could curb economic growth and metals demand.
Three-month copper on the London Metal Exchange CMCU3 was up 0.6 percent at $9,018 a ton, following a 0.5 percent gain in the previous session.
The most-traded May copper on the Shanghai Futures Exchange rose 0.7 percent to 69,650 yuan ($10,134.89) a ton.
“Copper mirrored gains across the commodities amid the improved risk appetite, but the gains were limited by lacklustre demand in China,” ANZ commodities strategists said in a note.
Regional US lender First Citizens BancShares scooped up the assets of SVB on Monday, triggering a relief rally in financial markets worried about the banking sector turmoil.
Downstream copper demand in top metals consumer China, meanwhile, dropped slightly last week due to “overseas macro factors” and rising prices, Huatai Futures analysts said in a note.
The US dollar slid for a second day against major peers on Tuesday as receding fears of a full-blown banking crisis sapped demand for the safest assets.
