LONDON, Aug 8 (Reuters) – Copper prices fell on Monday but were supported by higher imports of the industrial metal by China’s top consumer and hopes that interest rates will peak soon after increases to curb inflation.
Benchmark copper on the London Metal Exchange (LME) fell 0.1% to $7,860 a tonne at 10:58 GMT. Prices for the metal used as an indicator of economic health have climbed 13% since July 15, when they hit the lowest since November 2020 at $6,955.
“The rebound in metal prices and other risky assets more broadly comes on the back of hope that inflation may have peaked or passed,” said Duncan Hobbs, research director at Concord Resources.
“By association, this may mean that Fed-led central banks have reached or even passed the peak of hawkish policy. Whether these hopes are justified is debatable; the latest US jobs report was solid.”
US job growth unexpectedly accelerated in July, lifting employment above its pre-pandemic level and pouring cold water on fears that the economy is in recession.
Part of the reason for the rise in base metal prices over the past few weeks is that funds and traders are buying up short positions as the dollar retreated from all-time highs against other major currencies.
A weaker US currency makes dollar metals cheaper for holders of other currencies, which could boost demand.
China’s copper imports reached 463,693 tonnes in July, up 9.3% from a year earlier as the sharp drop in prices sparked buying amid falling domestic inventories.
Copper stocks in warehouses monitored by the Shanghai Futures Exchange
However, concerns over copper inventories in LME-registered warehouses have faded and are reflected in the discount for the three-month copper spot contract
LME copper stocks
Elsewhere, aluminum rose 0.7% to $2,433 a tonne, zinc fell 2.1% to $3,415, lead rose 1.8% to $2,109, tin fell 0.5% to $24,325 and nickel fell 2.3% to $21,705.
(Reporting by Pratima Desai editing by David Goodman)