(Updates prices, adds Cochilco)
LONDON, Jan 26 (Reuters) - Copper prices rose on Thursday as supply concerns mounted but gains were limited by the week-long Lunar New Year holiday in top consumer China, which has reduced market activity and demand for metal.
A weakening dollar and hopes for stronger Chinese demand after the nation ditched its zero-COVID policies pushed copper prices up by more than 20% since November, but prices have barely budged since Chinese markets closed.
Three-month copper on the London Metal Exchange (LME) was up 0.5% at $9,358 a tonne at 1711 GMT. Trading was thin, with markets were closed in India and Australia as well as China.
“The biggest thing many people are looking at is the China reopening,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China International, adding that industrial activity could start to recover in the coming weeks.
Fears of supply disruption in top copper producers Chile and Peru have added to concerns that additional demand from China’s reopening could stretch an already tight market.
Freeport-McMoRan Inc, which operates seven mines in the United States, also warned on Wednesday that its struggle to find workers is limiting its copper output.
However, Chile’s Cochilco predicted global surpluses of 160,000 tonnes in 2023 and 360,000 tonnes in 2024 while raising its 2023 copper price forecast to $3.85 a pound (around $8,490 a tonne).
In other metals, zinc gained 1.6% to $3,503.50 a tonne after touching $3,512, its highest price since the end of August. Inventories in LME-registered warehouses at 18,625 tonnes are down more than 90% from last April and the lowest in decades. MZNSTX-TOTAL
After posting gains in the previous four sessions, aluminium slipped 0.7% to $2,639 a tonne after stocks in the LME warehouse system jumped by 40,200 tonnes to 419,425 tonnes. MALSTX-TOTAL
Lead gained for a third straight session and was up 1.8% at $2,198.50 a tonne and nickel rose 0.4% to $29,300.
Tin was up 4.5% at $32,240 a tonne after reaching $32,400, the highest level since June. (Reporting by Swati Verma; Additional reporting by Brijesh Patel and Peter Hobson; Editing by Paul Simao, Kirsten Donovan)
Our Standards: The Thomson Reuters Trust Principles.