(Recasts with updated prices, adds analyst comment and London dateline)
LONDON, Dec 23 (Reuters) – Copper prices edged higher in London on Monday as they recovered to recent technical averages from last week’s fall, although dwindling pre-Christmas liquidity kept them in a tight range.
Three-month copper on the London Metal Exchange (LME) rose 0.4% to $8,977 per metric ton by 1103 GMT.
The metal, used in power and construction, lost 1.2% last week as the dollar hit a two-year high, making metals more attractive for buyers using other currencies.
Adding further pressure, the International Copper Study Group said on Friday that the global refined copper market was in a 287,000 metric ton surplus for the first 10 months of 2024.
With a mean reversion strategy in play, copper is likely to strengthen back above the crucial $9,000 mark, analysts at broker Sucden Financial said.
The U.S. dollar has appreciated nearly 7% this year, creating significant headwinds for growth-dependent metals, but most, with the exception of nickel and lead, posted gains.
Headwinds from the dollar may ease next year only to be replaced by the prospect of U.S. President-elect Donald Trump imposing import tariffs.
“The market appears to have already priced in moderate tariffs, but there is a risk that extreme tariff measures could undermine market confidence. China, the largest consumer of base metals, may offset this potential headwind through strong stimulus measures,” said WisdomTree commodity strategist Nitesh Shah.
“During its recent Politburo meeting, China indicated a willingness to intensify stimulus efforts but has not yet committed to a specific program, opting to keep its powder dry until the scale of U.S. protectionism becomes clearer,” Shah added.
LME aluminium rose 0.4% to $2,545 a ton, zinc climbed 1.7% to $3,022, lead gained 1.0% to $2,000.50, tin added 1.1% to $28,950 and nickel increased 0.8% to $15,475. (Reporting by Polina Devitt; Editing by Alexander Smith)
