(Updates prices)
By Pratima Desai
LONDON, Feb 27 (Reuters) - Copper rose on Monday as the
dollar weakened, but prices remained close to seven-week lows
due to a lack of evidence of a healthier demand outlook in top
consumer China ahead of key data on the country's manufacturing
sector.
While the dollar fell, it was still hovering near seven-week
highs against other major currencies on expectations that U.S.
interest rates could peak at a higher level than previously
forecast. A stronger U.S. currency makes dollar-priced industrial
metals more expensive for holders of other currencies,
potentially subduing demand.
Benchmark copper on the London Metal Exchange (LME)
had gained 1.2% to $8,816.50 a tonne by 1745 GMT after earlier
touching its lowest since Jan. 9 at $8,670.
Surveys of purchasing managers in China's manufacturing
sector, due this week, are expected to show growth. Purchasing
Managers' indices (PMI) are a strong lead indicator for metals
consumption and prices.
"There doesn't seem to have been any uptick in Chinese
consumption," said Sucden Financial analyst Geordie Wilkes.
"We need to see where the strength is coming in the PMIs ...
the new orders index is an indicator of fresh demand," he said.
A sign of weak demand overall is the discount for cash
copper against the three-month contract .
Copper stocks in warehouses monitored by the
Shanghai Futures Exchange have risen 360% to 252,455 tonnes
since Dec. 23, suggesting weak Chinese demand.
"Many assets rallied as China's government accelerated the
reopening of the economy. Copper ... has had the strongest start
to a year since 2003," said Bank of America analyst Michael
Widmer. "Yet this rally has been accompanied by weaker physical
markets in China."
In other metals, aluminium was up 1.5% at $2,370.50
a tonne, zinc rose 1% to $2,994, lead gained
1.7% to $2,106.50, tin was down 0.5% at $25,530 and
nickel climbed 3.7% to $25,450.
(Reporting by Pratima Desai
Additional reporting by Peter Hobson
Editing by David Goodman and Josie Kao)
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