LONDON- Copper prices edged lower on Friday but were still up about 7.5 percent over the first quarter as demand in top consumer China recovered from last year’s slump, with many analysts predicting further gains to come.
The metal used in electrical wiring hit a seven-month high of $9,550.50 a ton in mid-January but lost ground as US interest rates rose and China’s rebound proved less rapid than forecast.
Worries that turmoil in the banking sector will hinder economic growth have also pressured metals in recent weeks.
Benchmark copper on the London Metal Exchange (LME) was down 0.1 percent at $8,994.50 a ton but on track for its second consecutive quarterly gain.
Data on Friday showed that Chinese factory growth slowed in March. The numbers beat expectations but highlighted doubts about the strength of China’s post-COVID manufacturing recovery.
Chinese Yangshan copper import premiums, meanwhile, have fallen to $35.50 a ton from $50 in mid-March, suggesting lacklustre demand for overseas metal.
However, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell again in the week to Friday and stocks in the LME and COMEX exchange systems are low by historical standards.
“The fundamentals look strong,” said WisdomTree analyst Nitesh Shah, predicting that China’s economic recovery and a global shift towards copper-intensive electrification would boost demand. – Reuters
