Copper prices slipped on Thursday as poor demand prospects particularly in top consumer China and an oversupplied market were reinforced by further inventory rises in London Metal Exchange approved warehouses.
Benchmark copper on the LME was down 1.2% at USD 9,788 a metric ton at 1607 GMT. Prices of the metal used in power and construction have recovered since hitting 10-week lows of USD 9485.5 on June 27.
Optimism that China’s leaders will aim to boost growth with stimulus at their third plenum meeting on July 15-18 had helped support industrial metals in recent days.
“After the industrial metals managed to regain some lost ground on renewed rumours of stimulus measures in China, it seems that these hopes are fading again,” said Julius Baer analyst Carsten Menke.
“For the still struggling property market, we believe the government’s focus remains on reinstating trust rather than starting a new construction wave.”
Data releases over the next few days on China’s yuan loans and total social financing, widely watched by metals analysts, could yield clues to future demand.
Stocks of copper in LME warehouses jumped 11,300 tons on Wednesday taking the total to 206,775 tons, the highest since October 2021 and nearly double the levels seen in the middle of May.
Most of the deliveries are to warehouses in South Korea and Taiwan, the closest delivery locations for exports from China, usually a net importer.
Lack of concern about nearby supplies has pushed the discount for the cash over the three-month copper contract to a record high above USD 160 a ton.
Elsewhere, nickel bounced off the 14-week lows hit on Wednesday on funds and traders squaring their bets on lower prices after BHP Group said it will suspend its Western Australia nickel operations from October.
But nickel prices were last down 0.5% at USD 16,800 a ton. They have come under pressure from higher LME stocks, which at 98,382 tons have more than doubled since November.
In other metals, aluminium ceded 0.2% to USD 2,478, zinc fell 0.2% to USD 2,960, lead rose 0.7% to USD 2,194 and tin retreated 1% to USD 34,650.
