Copper firms on China's power initiatives in Africa

Copper prices firmed up on Thursday after China announced major investments in building power networks in Africa, but upside in the metal was limited by technical weakness.

The most traded three-month copper contract on the London Metal Exchange was up 0.8% at $9,034 a metric ton during official rings, bucking the declines across the rest of the metals complex.

China on Thursday pledged nearly $51 billion in funding for Africa, with a focus on improving power networks with shortcomings that have delayed industrialisation in the resource-rich continent.

Copper's high conductivity means that is widely used in electricity transmission for wind and solar plants.

However, copper prices still remained below the 21 and 50-day moving averages, signalling technical softness, one trader said, ading that copper's resilience is likely to be short-lived and prices will soon dip below $9,000.

"Every other metal has reverted back to previous levels after rallies in May," the trader added.

Continued weakness in China's property and construction sectors remain the main downside risk for industrial metals, said ING commodities strategist Ewa Manthey.

Zinc, mainly used to protect steel from corrosion in construction, fell 2% to $2,739 a ton after Russian zinc miner Ozernoye started production earlier than expected after a fire destroyed its facilities. "Nobody expected it to come back this year," a major zinc buyer said.

Among other metals, aluminium was down 0.7% at $2,381 a ton, nickel dropped 1.5% to $16,970, lead slipped 0.3% to $2,014 a ton and tin declined 1.3% to $30,100.

China's release of August trade, inflation and credit data in the coming week is expected to shed more light on metals demand prospects for the remainder of the year.