(Corrects paragraph 1 to say a weaker dollar made metals less
expensive, not more expensive)
May 4 (Reuters) - Most base metals 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 1.6% to $8,601.50 a tonne by 0531 GMT, while the
most-traded June copper contract on the Shanghai Futures
Exchange increased 0.3% to 67,110 yuan ($9,725.24) 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.
LME aluminium rose 0.4% to $2,330 a tonne, nickel increased 0.1% to $24,770 a tonne, zinc climbed
0.7% to $2,648 a tonne, lead was down 0.1% at $2,130 a
tonne while tin fell 1% to $26,550 a tonne.
SHFE aluminium increased 0.1% to 18,465 yuan a
tonne, nickel jumped 3.3% to 188,090 yuan a tonne, tin leaped 1.5% to 212,500 yuan a tonne, zinc advanced 0.6% to 21,330 yuan a tonne and lead was up
0.7% at 15,365 yuan a tonne.
Nickel inventories in SHFE warehouses fell to a
record low of 1,426 tonnes on Friday, supporting prices.
However, most metals prices were 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.
For the top stories in metals and other news, click or ($1 = 6.9006 yuan)
(Reporting by Mai Nguyen in Hanoi; editing by Uttaresh
Venkateshwaran)
mai.nguyen.thomsonreuters.com@reuters.net))
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