BEIJING- Copper prices climbed on Wednesday with renewed hopes of US rate cuts, while dismal physical demand outlook from top consumer China capped gains.
Three-month copper on the London Metal Exchange added 0.2 percent to $9,694.50 per metric ton, while the most-traded August copper contract on the Shanghai Futures Exchange was up 0.2 percent to 78,910 yuan ($10,849.27) a ton.
Federal Reserve Chair Jerome Powell struck a moderately dovish tone in his comments on Tuesday, suggesting that the US central bank is more than likely to start its easing cycle later this year.
The reinforced rate-cut expectations enhanced investors’ appetite in the equity market and brightened the overall demand prospect for metals. However, China’s protracted property crisis and high prices weighed down demand from the top consumer, pressuring prices.
China’s services activity expanded at the slowest pace in eight months and confidence hit a four-year low in June, dragged by slower growth in new orders, a private-sector survey showed on Wednesday.
The country’s apparent copper demand for the first half grew 2 percent , and the full-year demand is likely to contract 0.5 percent given a high second-half base effect, according to a July 1 note by Macquarie.
