LONDON- Copper prices rose on Friday as technical factors and lower available stocks supported recovery from the previous session’s six-week low, though gains are likely to be kept in check by cautious trading ahead of the Chinese New Year.
Three-month copper on the London Metal Exchange (LME) rose 0.6 percent to $8,361 a metric ton, heading for a weekly gain of 0.2 percent to end three weeks of declines. It hit $8,245 on Thursday for its lowest since Dec. 6.
“In the here and now, wider risk markets and some of our metals are exhibiting oversold technical pictures with some short-term buy signals,” said Al Munro at broker Marex, adding that gains may not be sustained over coming sessions.
On-warrant copper stocks in LME-registered warehouses fell to a four-month low after fresh cancellations, daily LME data showed.
“Official exchange inventories are much lighter than historically in similar bearish macro situations across the majority of the complex,” Munro said.
On the technical front, copper faces resistance from the 200-day moving average at $8,373 while the 100-day moving average supports it at $8,288.
In top metals consumer China, refined copper output rose by 13.5 percent in 2023, official data showed.
Beijing has instructed heavily indebted local governments to delay or halt some state-funded infrastructure projects, sources said, as the country struggles to contain debt risks while trying to stimulate the economy.