Copper edges down on stronger dollar; China cuts mortgage reference rate – 2024-02-19

NEW DELHI, Feb 20 (Reuters) – Copper edged lower on
Tuesday in volatile trade, pressured by a stronger U.S. dollar,
while traders weighed demand prospects in top consumer China
after the Lunar New Year break.

Prices were briefly up after China cut the benchmark
reference rate for mortgages at a monthly fixing as authorities
ramped up efforts to stimulate credit demand and revive the
property market.

The five-year loan prime rate (LPR) was
lowered by 25 basis points to 3.90% from 4.20% previously, while
the one-year LPR was left unchanged at 3.45%.

Three-month copper on the London Metal Exchange was
down 0.08% to $8,427.50 per metric ton by 0249 GMT.

The most-traded March copper contract on the Shanghai
Futures Exchange (SHFE) fell 0.1% to 68,360 yuan
($9,497.87) a ton.

In the broader currency market, the dollar edged higher,
though moves were largely subdued due to a U.S. holiday on
Monday.

A stronger U.S. currency makes dollar-priced metals more
expensive for holders of other currencies.

With China’s return from the Lunar New Year holiday break,
traders and analysts will be looking for clues to demand over
the coming weeks amid prospects of a pick-up in construction
activity as winter draws to an end.

“The metal (copper) is also expected to benefit from energy
transition, with investment in renewable energy infrastructure
in particular boosting demand enough to offset weakness in
traditional manufacturing/industrial sectors,” ANZ Research said
in a note.

Among other metals, LME aluminium fell 0.2% to
$2,193.50 a ton, nickel edged lower 0.3% to $16,300,
zinc was down 0.3% to $2,394.50, lead decreased
0.2% to $2,038.50 and tin fell 0.5% to $26,315.

SHFE aluminium edged lower 0.9% to 18,685 yuan a
ton, nickel was up 0.4% at 126,880 yuan, tin
fell 0.3% to 217,360 yuan, zinc rose 0.1% to 20,340
yuan, and lead was down 1% to 15,840 yuan.

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($1 = 7.1974 Chinese yuan)
(Reporting by Neha Arora; Editing by Subhranshu Sahu)