LONDON, Nov 10 (Reuters) - Copper prices edged higher on Wednesday as signs of tight supply offset concerns that economic growth is slowing in China, the world’s biggest metals consumer.
Data showed that Chinese factory gate prices rose last month at the fastest pace in 26 years, reducing the chances of an interest rate cut to stimulate the economy.
China’s metals-intensive construction sector, meanwhile, is engulfed in a debt crisis, with property developer China Evergrande Group facing a bond repayment deadline on Wednesday.
But copper inventories -- at least those in warehouses that publish data -- are so low that traders are paying large premiums to get their hands on metal.
Benchmark copper on the London Metal Exchange (LME) was up 0.1% at $9,565 a tonne in official trading.
Prices are up by about 23% this year after rising 26% in 2020, but they have lost momentum since reaching a record high of $10,747.50 in May.
Slowing growth in China and elsewhere is holding copper down but prices will rise over the longer term as the world transitions to cleaner energy and needs more copper to conduct electricity, said WisdomTree analyst Nitesh Shah.
“It’s quite a nice buying opportunity right now,” he said.
MARKETS: Global equities steadied below this week’s record highs. Chinese stock markets fell.
INFLATION: U.S. consumer prices increased more than expected in October.
STOCKS: On-warrant inventories in LME-registered warehouses rose to 46,150 tonnes but quickly deliverable cash metal still costs about $250 more than the three-month contract, suggesting tight supply.
STOCKS: On-warrant inventories in LME-registered warehouses rose to 46,150 tonnes but quickly deliverable cash metal still costs about $250 more than the three-month contract, suggesting tight supply.
Stockpiles in China have fallen sharply.
Stockpiles in China have fallen sharply.
OUTPUT: Copper production by China’s major smelters in October fell by 2.2% from September, researchers Antaike said, though it predicted higher output in November.
STRIKE: Protesters again blocked a road used to transport metal from the Las Bambas copper mine in Peru, a community leader said.
OTHER METALS: LME aluminium was up 0.7% at $2,573 a tonne, zinc was flat at $3,282, nickel gained 0.5% to $19,500, lead fell 0.7% to $2,323 and tin was down 0.3% at $37,300.
Reporting by Peter Hobson Additional reporting by Mai Nguyen in Hanoi Editing by David Goodman
Source: Reuters