(Updates prices)
By Pratima Desai
April 24 (Reuters) - Copper prices fell to more than a
two-week low on Monday as the market focused on lacklustre
demand in top consumer China, while a softer dollar helped to
cap losses.
Benchmark copper on the London Metal Exchange (LME)
was trading 0.6% lower at $8,739 a tonne by 1554 GMT, having
earlier touched $8,726.5, its lowest level since April 5.
Hopes for stronger copper demand in China after the removal
of COVID restrictions have proved forlorn so far, with activity
in the manufacturing sector growing more slowly than expected.
"China reopening euphoria has faded. This is not a surprise
as we thought from the beginning that this recovery would be
services-driven," Julius Baer analyst Carsten Menke said, adding
that an inventory overhang of manufactured goods was also
weighing on demand.
Weak demand in China can be seen in the Yangshan copper
premium , which has more than halved to $23 a tonne
since March 17.
Elsewhere, traders are watching the large holdings of
warrants and cash contracts for LME lead , which has
fuelled worries about near-term supplies and created a hefty
premium for cash metal over the three-month contract.
The premium hit $35.25 a tonne on Friday, its
highest since early January. It was last at $31.75 a tonne.
Three-month lead was down 0.8% at $2,143.5.
In the aluminium market, the focus was on the recent
cancellation of warrants to take delivery of 10,200 tonnes from
LME-registered warehouses in Gwangyang, where there has been a
build-up of Russian metal.
"We believe it is genuine demand," Marex said in a note.
"Some of our Far East client base has been looking for warrants
of late."
In other metals, LME zinc fell 1.6% to $2,675 a
tonne after hitting $2,664, its lowest price since Nov. 3.
Aluminium slipped 0.6% to $2,382.5 after hitting a
one-week low, and nickel was down 0.2% at $24,425 after
touching its weakest level since April 14. Tin was up
0.1% at $26,625.
Industrial metals found some support from the dollar, which
has fallen on perceptions that the U.S. Federal Reserve will
raise interest rates less aggressively than previously expected.
A weaker U.S. currency makes dollar-priced metals cheaper
for buyers holding other currencies. (Reporting by Pratima Desai; additional reporting by Polina
Devitt; editing by David Goodman and Paul Simao)
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