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LONDON, Sept 27 (Reuters) – Copper prices hovered near a four-month low on Wednesday as uncertainty about China’s property market was reinforced by mounting problems at a major developer as the market waited for data from the country’s large industrial base later this week.
Benchmark copper on the London Metal Exchange was up 0.2% at $8,104 a metric ton at 1601 GMT, after hitting an earlier session low of $8,071. Used in power and construction, copper earlier this week hit $8,068, the lowest price since late May.
The latest development in China’s stalled property market was news that the chairman of property developer Evergrande was under police surveillance, according to Bloomberg News, added to concerns about Evergrande’s future.
“It highlights just how precarious things are and the problems facing copper demand and industrial metals overall,” a metals trader said. “The strong dollar is a major headwind.”
The U.S. currency scaled 10-month highs against its major peers, making dollar-priced commodities more expensive for holders of other currencies, which would subdue demand. This relationship is used by funds to generate buy and sell signals from numerical models.
A large drop in profits at Chinese industrial firms in the first eight months of the year also weighed as the market waited for surveys of purchasing managers in manufacturing later this week. Focus will be on new and export orders.
Elsewhere, the discount for the cash over the three-month copper CMCU0-3 contract narrowed after hitting 31-year highs on Monday. Traders said this was due to a large holding of warrants in the LME system.
However, rising copper stocks in LME-registered warehouses MCUSTX-TOTAL are a negative factor. At 167,850 tons, they are up more than 200% since the middle of July and are at the highest since May of 2022.
Meanwhile, battery metal lead has come under pressure