May 2 (Reuters) - Copper prices edged higher to hit a
one-week high on Tuesday following a three-day weekend in
London, though trading was thin as the Shanghai Futures Exchange
remained shut for a national holiday.
While top metals consumer China's financial markets will
remain closed until Wednesday, the focus is on whether the U.S.
Federal Reserve will indicate that it expects a pause in
interest rate increases, after a widely expected hike of 25
basis points to be delivered this week.
Three-month copper on the London Metal Exchange was
up 0.7% at $8,655 a tonne, as of 0215 GMT, having reached $8,714
earlier in the session, its strongest since April 25.
Copper suffered a 4.4% slump in April, its biggest monthly
loss since June, pressured by the sluggish pace of metals demand
recovery in China despite shedding strict COVID-19 restrictions.
China's manufacturing activity unexpectedly shrank in April,
official data showed on Sunday, raising pressure on policymakers
seeking to boost an economy struggling for a post-COVID lift-off
amid subdued global demand and persistent property weakness.
"We believe that the government will resume subsidies on
electric vehicles, which would benefit both the manufacturing
and services sector. The government might also push
infrastructure construction faster," ING economists said in a
note.
Support from the supply side may, however, wane in coming
months.
"Copper and nickel inventories at exchanges remain low.
However, key copper producers have flagged significant inventory
build at mine is set to flow to market, while new nickel
refining capacity is scheduled to come online throughout 2023 to
2025, supporting an easing in market conditions," National
Australia Bank said in a quarterly report on Monday.
In other metals, aluminium climbed 0.6% to $2,370.50
a tonne, zinc climbed 0.4% to $2,658, lead gained 0.2% to $2,153, tin rose 0.4% to $26,200, while
nickel was virtually flat at $24,210.
For the top stories in metals and other news, click or (Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi
Aich)
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