(Updates 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)
climbed 1.9% to $8,965.50 a tonne by 1700 GMT after gaining 1%
on Monday. The contract, however, was down 2.7% on a monthly basis for
its first such decline since October.
U.S. Comex copper futures gained 2.1% to $4.09 per
lb.
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."
At Monday's low point, LME copper had dropped 9% since
hitting a seven-month peak in January at $9,550.50 a tonne. In
January, copper 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, but 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 rose 0.4% to
$2,371.50 a tonne and zinc gained 0.6% to $3,006.50
while nickel slid 3.2% to $24,685, lead eased by
0.3% to $2,105.50 and tin dropped 2.6% to $24,805.
For the top stories in metals and other news, click or (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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