Copper falls as rising inventory weighs
- Three-month copper on the London Metal Exchange fell 0.40% to $14,159 a metric ton
London copper fell on Monday as a build-up in exchange inventories and a sharp narrowing in nearby spreads pointed to easing supply tightness, while a weaker US dollar limited losses.
Three-month copper on the London Metal Exchange fell 0.40% to $14,159 a metric ton by 0321 GMT.
The most-traded September copper contract on the Shanghai Futures Exchange was 0.48% higher at 107,800 yuan ($16,034.75) a ton, but still giving back some of its gains during Friday’s evening session/ On the LME, the premium of cash copper against three-month copper continued to narrow.
The cash premium surged to its widest since 2021 on August 17, during a sharp squeeze in nearby supplies that prompted an influx of metal into LME warehouses.
Copper inventories in LME-monitored warehouses slipped 0.56% to 238,575 tons on August 20, but remained around 16% higher than the 204,975 tons recorded on Aug 14, when stocks were at their lowest since February.
Inventories in warehouses monitored by the Shanghai Futures Exchange also rose sharply last week, jumping 28.4% to 89,548 tons on Friday.
On-warrant copper stocks increased by 12,429 tons to 46,105 tons.
Inventory increases on both exchanges, along with the rapid narrowing of the LME backwardation, have eased some immediate availability concerns that drove copper prices and nearby spreads sharply higher last week.
The US dollar hovered near multi-month lows on Monday after falling nearly 1% last week, weighed down by concerns over US debt and the Treasury’s move to increase buybacks of longer-dated bonds.
A weaker dollar makes greenback-priced commodities cheaper for buyers using other currencies.
The market will monitor this week’s Jackson Hole meeting and the Federal Reserve Chair’s speech for more interest-rate clues.
Among other LME metals, aluminium rose 0.09%, zinc fell 0.47%, lead gained 0.18%, nickel declined 0.46% and tin dropped 0.73%.
On SHFE, aluminium was up 0.89%, zinc rose 1.15%, lead gained 0.47% and nickel added 0.83%, while tin fell 0.72%.
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