LONDON- Copper prices rose on Friday after strong US jobs data brightened the near-term economic outlook, but the gains only offset losses suffered earlier in the week due to lacklustre demand in China and rising inventories.
The jobs numbers helped trigger a rally in global stock markets and oil prices, but they also raise the threat of higher-for-longer interest rates, which should over time restrain economic growth.
Benchmark copper on the London Metal Exchange (LME) was up 0.9 percent at $8,568.50 a ton but still down about 0.3 percent for the week.
The metal used in electrical wiring has fallen 10 percent from a high of $9,550.50 in January and many analysts expect further losses before supply shortages lift prices again.
Pressuring copper are a weaker than expected demand recovery in China, where manufacturing contracted in April, and fast-rising interest rates in the United States and other countries that have caused a string of US bank failures.
The US Federal Reserve is “hitting the brakes like we’ve never seen before”, said Bjarne Schieldrop, chief commodities analyst at Swedish banking group SEB.
“There should be a further (economic) slowdown and weakness in copper prices,” he said.
“The outlook for copper is probably very bright in the coming years but maybe not in the coming half year.” – Reuters
