Copper gains on weaker dollar, limited Middle-East escalation

SINGAPORE: Copper advanced on Friday, supported by a weak dollar and easing fears around a rash of tit-for-tat strikes between the US and Iran.

Benchmark three-month copper on the London Metal Exchange was up 0.29% at $13,528 a metric ton by 0300 GMT.

The most-traded copper contract on the Shanghai Futures Exchange rose 1.61% to 103,950 yuan ($15,334.80) a ton.

That marks a 1.2% increase this week on the LME, a volatile one in which a new round of fighting between the US and Iran raised fears about risks to macroeconomic conditions and inflation.

The dollar was on track to fall for a third consecutive day, supporting copper prices by making it cheaper for buyers using other currencies.

New York Federal Reserve President John Williams on Thursday downplayed the inflationary impact of the latest Middle East flare-up.

Inflation and interest rate considerations weigh heavily onthe pricing ofgrowth-dependent industrial metals like copper. Higher interest rates dampen demand by curbing economic activity. Aluminium gained 0.55% on the LME and 0.67% on the SHFE.

With a more than 4% increase on the LME, prices for the light metal are set for their best week since April.

Aluminium has been supported by a waning in itsstockpilesamid disrupted Middle East supply. Lost production from the region that is home to some 9% of global smelting capacity has helped push the market into a deficit.

Total LME aluminium stocks remain at lows last seen in 2022. LME zinc inched up 0.06%, after rallying more than 3% on Thursday on a reported fire at a South Korean smelter, while the SHFE price gained 1.32%. Among other LME metals, lead added 0.18%, nickel added 0.29% and tin ticked 0.1% higher.

Elsewhere on SHFE, lead was little changed, up only 0.03%, nickel gained 1.13% and tin rose 2.38%. ‑Reuters