Sagging demand drags copper towards 6th straight weekly loss
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Copper prices rose on Friday but remained on track for a sixth consecutive weekly loss amid lacklustre demand from top metals consumer China and other markets.
Benchmark copper on the London Metal Exchange (LME) was up 1.6% at $8 091.50 a tonne at 09:46 GMT but down around 2% from last Friday's close.
Prices of the metal used in electrical wiring have fallen 15% from a high in January and this week dipped below $8 000 for the first time since November.
Speculators have amassed their biggest short positions in US copper futures in 10 months as China's economic recovery falls short of expectations and rising interest rates slow growth in other countries, weakening demand for metal.
Prices were boosted by better than expected US economic data on Thursday and signs that a deal to raise the US debt ceiling is close, which eased worries of a default and weakened the dollar.
A key area of technical support for copper around $7 800 to $7 900 has held and prices should now stabilise, said Saxo Bank analyst Ole Hansen.
"We've hit a significant level of support. We've priced in a lot of bad news. This makes me wonder whether there is much more selling left in the market," he said.
Like many analysts, Hansen believes the copper deficits will soon emerge to lift prices.
But for now, demand is weak. Copper inventories in LME-registered warehouses have almost doubled in the last month to 97 725 t.
LME zinc CMZN3 was up 2.2% at $2 322 a tonne but still down around 6.5% this week, having slipped on Thursday to its lowest since July 2020.
LME zinc inventories have risen fivefold since February to 74 550 tonnes and weak demand for steel -- which zinc is used to galvanise -- pushed Chinese rebar prices to their lowest in three years this week.
In other metals, LME aluminium CMAL3 rose 1.2% to $2 258 a tonne, lead CMPB3 fell 0.2% to $2 070.50, nickel CMNI3 was up 1.8% at $21 615 and tin CMSN3 climbed 1.2% to $24 895.