London copper prices steady as US dollar weakens

Recasts and updates prices, as of 0538 GMT

BEIJING, Jan 15 (Reuters) –London copper prices were steady on Monday as the U.S. dollar weakened, while investors gauged demand outlook from top consumer China after its central back surprised markets by keeping its medium-term policy rate steady.

Three-month copper on the London Metal Exchange CMCU3 held ground at $8,350 per metric ton by 0538 GMT, having shed 1.5% last week.

The dollar ebbed as bets for a Federal Reserve’s rate cut in March have gathered steam after data on Friday showed U.S. producer prices unexpectedly fell last month.

A weaker U.S. dollar makes it cheaper for traders to buy the greenback-priced commodity.

China’s central bank left the medium-term policy rate unchanged on Monday, defying market expectations for a cut as a weaker currency limited the scope of monetary easing in the near term to boost the economy.

Investors are waiting for China’s release of its fourth-quarter gross domestic product (GDP) and December industrial production on Wednesday.

The most-traded February copper contract on the Shanghai Futures Exchange SCFcv1 lost 0.3% to 67,860 yuan ($9,463.78)per ton.

Analysts at GF Futures noted that pre-holiday replenishment from end-users were weaker than usual, spot market in China will likely remain tepid.

The market, however, was supported by mine-side disruption. A slump in copper charges in China as smelters scramble for raw material could further erode margins for Chinese firms and potentially lower their production of refined copper.

LME aluminium CMAL3 nudged 0.1% higher to $2,220.50 a ton, lead CMPB3 was up 0.1% at $2,092.50, tin CMSN3 rose 1.1% to $24,890 and zinc CMZN3 gained 0.8% to $2,534.50, while nickel CMNI3 fell 0.3% to $16,295.

SHFE nickel SNIcv1 lost 1.2% to 127,390 yuan a ton, lead SPBcv1 slid 1.6% to 16,200 yuan, aluminium SAFcv1 eased 0.3% to 18,940 yuan, while tin SSNcv1 rose 1.3% to 209,210 yuan, zinc SZNcv1 gained 0.2% to 21,175 yuan.

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($1 = 7.1705 Chinese yuan)

Reporting by Siyi Liu and Mei Mei Chu; Editing by Sherry Jacob-Phillips

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