(Updates prices)
By Polina Devitt
LONDON, May 15 (Reuters) - Copper prices rose on Monday
as a liquidity injection by China's central bank demonstrated
support for the Chinese economy and helped the metal recover
from a five-month low hit last week.
Benchmark copper on the London Metal Exchange (LME)
was up 0.3% at $8,279 a tonne by 1615 GMT. The metal had touched
$8,136.50 on Friday for its lowest since Nov. 30, pressured by
concerns over demand from top consumer China and selling by
momentum-based funds.
"We are seeing a marginal rebound in base metal sentiment
following last week's sustained weakness," said Arthur Parish,
metals associate at SP Angel.
"Several signs of optimism are developing from China, with
today's PBOC liquidity injection likely driving the short-term
recovery in prices. Copper demand remains muted and inventory
levels are high." Along with the central bank's liquidity injection, there is
also some "bargain hunting" after last week's weakness in
metals, said Julius Baer analyst Carsten Menke.
The U.S. dollar, meanwhile, fell from a five-week high,
making dollar-denominated metals more attractive to buyers
holding other currencies.
China is due to report monthly industrial production and
retail sales on Tuesday, providing evidence of whether demand is
finally picking up after the lifting of COVID-19 curbs early
this year.
On the supply side, a copper mine in Tibet stopped
production after an accident, adding further support for the
market.
LME aluminium was up 1.4% at $2,263.5 a tonne after
on-warrant stocks in the LME-registered warehouses declined to a
three-month low of 373,025 tonnes.
Lead was up 0.1% at $2,078 and tin gained
0.7% to $25,000 while zinc was down 0.5% at $2,537.5 and
nickel fell 2.6% to $21,635 after touching $21,565 for
its lowest since Oct. 21.
Citi cut its forecast for nickel and zinc last week, saying
that nickel was "looking vulnerable" fundamentally.
(Reporting by Polina Devitt in London
Additional reporting by Enrico Dela Cruz in Manila
Editing by David Goodman)
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