LONDON – Copper prices were steady on Friday as concerns over the impact of higher prices on global growth were offset by low inventories in exchange warehouse, pointing to solid demand.
Benchmark copper on the London Metal Exchange (LME) shed 0.2 per cent to $9,248 a tonne by 10:53 GMT but the metal widely viewed as a gauge of global economic health remained on track for a weekly gain.
Market focus turns to non-farm payrolls later in the day after a week of fretting over the economic impact of soaring energy prices and the prospects of faster than expected interest rate rises to combat inflation.
“The only cloud hanging over the copper is a worsening macro picture, but the supply picture is so tight and that is preventing the copper price from going lower,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity.
“Recent developments regarding Chinese property markets and the likely impact of the energy crunch on Chinese economic activity are clear reasons to believe that demand for copper will be weaker in the near term than had been anticipated,” Jefferies analysts said according to Reuters.
However, global exchange copper inventories are down 23 per cent since late August and the copper price was flat over that period, the analysts said.
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