London - Copper prices edged up on Tuesday, helped by a weak dollar and ahead of key trade and industrial output data from China later this week, which is likely to shed light on the outlook for demand from the top consumer of metals.
Three-month copper on the London Metal Exchange was at $7,056 a tonne at 11:27 SA time, up 1.1 percent from a close of $6,975 on Monday.
Volumes, however, remained thin due to the summer holiday period.
Helping gains was a drop in the dollar against a basket of currencies.
A weak dollar makes commodities priced in the US unit cheaper for holders of other currencies.
Metals market direction is likely to be dictated by data from China this week, which is expected to confirm that the economy is still shifting down but is not about to come to a screeching halt.
Data scheduled for this week include trade numbers, inflation, industrial output and retail sales.
China is the world's largest consumer of copper, accounting for around 40 percent of global refined demand.
“In China there seems to be a gradual ramping up of infrastructure projects to help support growth. I'm not too negative on the outlook for copper demand from China,” said Nic Brown, head of commodities research at Natixis.
“There are signs of shortage in the physical market (in China) and the macroeconomic situation looks okay.”
Copper prices have found a floor around the $6,700 a tonne level with consistent buying emerging on dips, traders and analysts said. The metal used in power and construction is down 11 percent so far this year.
“July to early September is traditionally a slack season for demand in China. Traditionally speaking, producers of copper
electrical wire will start preparing for orders around Christmas and Chinese New Year and that will then give support,” said Chunlan Li of consultancy CRU in Beijing.
In other metals, immediate demand for tin has surged in the past month, pushing up LME cash prices to a $28 premium over three-month prices, the highest since November last year, from a $67 discount a month ago.
Benchmark tin was at $21,359 a tonne, from a close of $21,225 on Monday.
An Indonesian overhaul of tin trading rules that raises minimum purity levels is expected to slash shipments from the world's top refined tin exporter for a few months, potentially pushing up prices for the metal. - Reuters