By Pratima Desai

LONDON, Feb 12 (Reuters)Copper prices held steady on Monday in low volumes due to the Chinese Lunar New Year holiday as the market waited for U.S. inflation data which could indicate when the Federal Reserve might cut interest rates.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 0.1% at $8,176 a metric ton at 1019 GMT. Prices of the metal, used in the power and construction industries, hit three-month lows of $8,127 last week on concerns about demand prospects in top consumer China.

“It’s quiet because of the Chinese holiday, people are still nervous about Chinese demand,” a copper trader said. “What happens to the dollar this week will be very important in China’s absence.”

U.S. consumer prices due this week could determine when U.S. interest rates are cut, which in turn could mean a lower dollar.

A falling U.S. currency makes dollar-priced metals cheaper for holders of other currencies, which could boost demand.

Overall, industrial metals are expected to remain under pressure from trouble in China’s property sector, which now seems to be rippling out into the rest of the world.

“Real estate fears which first appeared and remain to the fore in China are spreading to the U.S. where New York Community Bancorp has been hammered for its exposure to commercial property,” broker Marex said in a note.

Elsewhere, zinc fell to $2,278 a ton, the lowest since August last year, due to surpluses of the metal used to galvanise steel, a key material for the construction industry where activity has slowed.

Surpluses can be seen in the higher zinc stocks in LME-registered warehouses MZNSTX-TOTAL, which at 238,275 tons have climbed 25% since late December and are at their highest since August 2021.

Zinc CMZN3 was last up 1% at $2.323 a ton.

In other metals, aluminium CMAL3 slipped 0.2% to $2,212, lead CMPB3 gained 0.9% to $2,050, tin CMSN3 added 1.6% to $26,800 and nickel CMNI3 advanced 0.6% to $16,020.

(Reporting by Pratima Desai; Editing by Shilpi Majumdar)

((pratima.desai@thomsonreuters.com))

Source: Nasdaq

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