METALS-Copper prices in London dip as weak China demand persists

The most-traded March copper contract on the Shanghai Futures Exchange rose 1.5% to 70,100 yuan a tonne, tracking overnight gains in London. Hopes for a demand recovery in China post COVID-19 have supported prices, but some market participants now expect the rebound to kick in by March, disappointing those who had hoped for an early recovery in February. "There was some demand improvement comparing with two weeks ago, but it has not yet to returned to normal as the market is sensitive to (rising) copper prices," said He Tianyu, a China copper analyst at CRU Group. "Most people think (demand recovery will happen) in mid or late March, or early in the second quarter."

Higher copper prices have also discouraged some users from purchasing the metal in large volumes, and they are waiting for an economic rebound and supportive policy from the Chinese government to boost demand for their products. LME copper prices leapt about 15% in the first two weeks of January, then lost about 9% within a month. They have since been rangebound between $8,700 and $9,200. Copper users will need time to adjust to higher prices, but will eventually have to accept them, He added. LME aluminium rose 0.7% to $2,474 a tonne, zinc edged up 0.2% to $3,133.50 a tonne, lead advanced 0.1% to $2,156.50 a tonne and tin rose 1% to 26,965 yuan a tonne. ShFE aluminium gained 0.6% to 18,775 yuan a tonne, nickel advanced 4% to 210,210 yuan a tonne, tin jumped 4.8% to 217,750 yuan a tonne, zinc climbed 1.7% to 23,575 yuan a tonne and lead rose 1.6% to 15,395 yuan a tonne. China's Yunnan province has asked aluminium producers to further cut their electricity usage amid a power supply crunch, potentially reducing annual aluminium output capacity by about 740,000 tonnes, Shanghai Securities News said on Monday. For the top stories in metals and other news, click or (Reporting by Mai Nguyen in Hanoi; Editing by Vinay Dwivedi and Jan Harvey)