MARKET OUTLOOK - Basic Metals Rebound on Bargain Hunting, But Strong Dollar Weighs Down

Forex - Base metal prices have largely risen, supported by physical consumer dip buying; however, a strong dollar and weak Chinese data limited further gains.

At the London Metal Exchange (LME), three-month copper traded at $9,027 per ton, up 0.3% as of 07:10 GMT, aluminum increased by 1.4% to $2,687.50 per ton, and nickel rose by 0.8% to $15,665 per ton.

Zinc at LME traded at $2,973 per ton, up 0.9%, lead increased by 0.7% to $1,971 per ton, and tin was up 0.3% at $28,835 per ton.

At the Shanghai Futures Exchange (SHFE), the December copper contract remained steady at 73,770 yuan per ton ($10,196.69).

In SHFE, aluminum fell by 1.3% to 20,525 yuan per ton, nickel increased by 0.9% to 124,500 yuan per ton, tin declined by 0.6% to 240,670 yuan per ton, lead was up by 0.1% to 16,795 yuan per ton, and zinc remained flat at 24,680 yuan per ton.

Analysts noted that consumers were inclined to buy as prices fell to the lowest levels in the past two months, but they indicated this trend might soon end since price trends are determined not by consumers but by speculators. Analysts expect that after dip buying decreases, speculators will begin selling.

The dollar rose today, nearing its highest level in a year.

In China, the world's largest metal consumer, economic growth is slowing, and the government is announcing supportive policies to stimulate power; however, the measures taken so far have not directly targeted physical metal consumption.

Concerns about supply tightness outside of China have also somewhat supported prices following Beijing's announcement to cancel export tax rebates for aluminum and copper products.