LONDON, May 24 (Reuters) - Copper prices rose on Monday as a softer dollar spurred modest purchases, but gains were capped by concerns over price curbs on industrial metals in top consumer China.
Benchmark copper on the London Metal Exchange (LME) was up 0.3% at $9,916 a tonne at 1014 GMT.
However, prices of the metal used widely in the power and construction industries are down 8% since touching a record high of $10,747.50 a tonne earlier this month.
“The dollar is giving some support to copper, but overall the mood is negative,” one metals trader said. “Still, the market did need a breather and consolidation.”
PRICES: China’s market regulators warned industrial metal companies to maintain “normal market order” during talks on the significant gains in metals prices this year.
China’s government also said last week that it would manage “unreasonable” price increases for commodities such as copper, coal, steel and iron ore.
DOLLAR: A lower U.S. currency makes dollar-denominated metals cheaper for holders of other currencies, which could potentially boost demand.
SPREAD: Some concern about supplies on the LME market has narrowed the discount for cash copper over the three-month contract to about $14 a tonne from $28 last week.
TECHNICALS: Upside resistance for copper comes in at the psychological $10,000 and then at $10,080, where the 21-day moving average currently sits. Trendline and the 50-day moving average at $9,400 provide strong support.
CHILE: Supporting copper is political uncertainty in Peru and top producer Chile.
An overhaul of Chile’s market-orientated constitution is under way and the country is debating whether to increase royalties on miners.
Peru, the No. 2 producer, is heading for a polarised June presidential election. Leading in the polls is a little-known socialist who wants to redistribute mining wealth.
OTHER METALS: Aluminium was down 1.1% at $2,343 a tonne, zinc fell 1.1% to $2,938, lead ceded 1% to $2,166, tin slipped 0.4% to $29,410 and nickel gained 0.3% to $16,840.
Reporting by Pratima Desai Editing by David Goodman
Source: Reuters