(Corrects paragraph 1 to say a weaker dollar made metals less
expensive, not more expensive)
May 4 (Reuters) - Copper prices rose on Thursday, as a
weaker dollar made greenback-priced metals less expensive to
holders of other currencies, but a weaker-than-expected demand
recovery in top consumer China prevented a stronger rally.
Three-month copper on the London Metal Exchange advanced 1.2% to $8,568 a tonne by 0738 GMT, while the
most-traded June copper contract on the Shanghai Futures
Exchange closed almost flat at 66,920 yuan ($9,678.91)
a tonne.
The dollar slipped against most major currencies after the
U.S. Federal Reserve opened the door to a pause in its
aggressive tightening cycle.
However, metals prices were still under pressure due to
weaker-than-expected demand in top consumer China.
China's factory activity unexpectedly contracted in April as
orders fell and poor domestic demand dragged on the sprawling
manufacturing sector, which uses a vast amount of metals.
"The market has become increasingly frustrated with the slow
rebound in economic activity in China. This has seen investors
reduce their net bullish positions on LME copper to a six-week
low," said ANZ analysts in a note.
Citi analysts said they were bearish on copper and
downgraded the 0-3-month price forecast to $8,000 a tonne, from
$8,500 a tonne previously.
"Weak global demand and high finished goods inventories,
together with improving copper supply (scrap sector
de-bottlenecking, mine supply debottlenecking, strong China
refined supply), mean that a copper stock out is extremely
unlikely in 2023 in our view," they said in a note.
LME aluminium was almost unchanged at $2,322 a
tonne, nickel increased 0.6% to $24,895 a tonne, lead was up 0.4% at $2,138.50 a tonne while while zinc fell 0.1% to $2,627.50 a tonne and tin declined
2.8% to $26,020 a tonne.
SHFE nickel jumped 2.9% to 187,280 yuan a tonne,
tin leaped 0.8% to 211,000 yuan a tonne, lead was up 0.8% at 15,370 yuan a tonne while zinc fell 0.5%
to 21,100 yuan a tonne and aluminium dipped 0.1% to
18,415 yuan a tonne.
Nickel inventories in SHFE warehouses fell to a
record low of 1,426 tonnes on Friday, supporting prices.
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(Reporting by Mai Nguyen in Hanoi; editing by Uttaresh
Venkateshwaran and Nivedita Bhattacharjee)
mai.nguyen.thomsonreuters.com@reuters.net))
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