(Updates with official prices)
By Eric Onstad
LONDON, Feb 28 (Reuters) - Copper prices extended a
rebound on Tuesday as speculators adjusted positions on hopes
for a demand revival in top metals consumer China.
Benchmark copper on the London Metal Exchange (LME)
traded up 0.6% at $8,851 a tonne in official rings after gaining
1% on Monday.
The contract, however, was down 3.3% on a monthly basis for
its first such decline since October.
LME copper bounced from an important level for investors
watching technical signals, said Ole Hansen, head of commodity
strategy at Saxo Bank in Copenhagen.
Gains are being driven by profit-taking by speculators who
had taken short positions as well as some fresh longs by
investors taking advantage of a cheaper level to enter the
market, he added.
"I'm relatively constructive on the price action going
forward and, not least, given the fact that the bounce has taken
place at an important technical level," Hansen said.
"That indicates that the weakness we've seen is more a
correction within a market that wants to go higher."
LME copper has retreated almost 7% since hitting a
seven-month peak in January at $9,550.50 a tonne, having rallied
largely on hopes that the loosening of strict COVID-19 controls
in China would boost demand.
Copper demand in China remained weak in February, weighing
on prices, while a stronger U.S. currency made the dollar-priced
metal more expensive to buyers with other currencies.
Analysts expect the Chinese economy to recover strongly from
as early as March, with the government likely to roll out more
stimulus at the National People's Congress.
The Yangshan copper premium , which reflects
demand to import copper into China, rose to $26.50 a tonne on
Monday for its highest since Feb. 1.
Among other metals, LME aluminium fell 0.8% to
$2,345 a tonne, zinc rose 0.3% to $2,996.50, nickel dropped 1.8% to $25,050, lead was down 1.4% at
$2,081 and tin slipped by 0.7% to $25,300.
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(Reporting by Eric Onstad
Additional reporting by Mai Nguyen in Hanoi and Polina Devitt in
London
Editing by Shounak Dasgupta and David Goodman
)
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