Copper prices fell on Friday under pressure from a stronger dollar, but are on track for a modest gain this year on strong demand from China and hopes of a US interest rate cut.
Copper for delivery in three months on the London Metal Exchange (LME) was down 0.1 per cent at $8,613 a metric tonne by 1130 GMT. LME copper prices are up 2.8 per cent this year, partially reversing a 13.9 per cent decline in 2022.
Investors are divided over the outlook for 2024, with bulls highlighting the prospect of further stimulus in top metals consumer China, demand from a green transition and hopes of interest rate cuts as inflation subsides.
Others are more cautious, as weak growth could lead to a recession in some countries.
"It looks like the global economy will slow further in the first half of 2024, which means the bullish metals story some are publishing may have to wait a while," said Malcolm Freeman, CEO of Kingdom Futures.
However, copper demand has climbed 3.2 per cent this year after China abandoned its zero coronavirus policy, according to analysts at brokerage China Futures.
By 2024, annual growth will slow to 2.8 percent as the housing sector remains sluggish, partly offset by increased investment in the power grid and strong solar and wind sectors, they added.
Copper is widely used in power, construction and transportation.
The market was also supported by a tightening copper concentrate supply outlook amid mine closures and production disruptions. Underscoring this, several of China's largest copper smelters cut their first-quarter copper expense forecasts on Thursday.
Weighing on metals prices is the strength of the U.S. dollar index, which makes commodities priced in the greenback more expensive for buyers using other currencies.
LME nickel fell 1.3 per cent to $16,515 a tonne after LME inventories hit a fresh 18-month high and have surged 38 per cent this month, underlining oversupply.
LME aluminium edged up 0.1 per cent to $2,379.50 a tonne, zinc rose 0.3 per cent to $2,648.50 a tonne, lead fell 0.9 per cent to $2,068.50 a tonne and tin fell 1 per cent to $25,420 a tonne.
