Copper drifts higher on rally in tech stocks and weaker dollar
- Benchmark three-month copper on the London Metal Exchange was up 0.1% at $14,420 a metric ton
LONDON: Copper prices gained for a third straight session on Tuesday, boosted by a rally on stock markets, a weaker dollar, and expectations for firmer demand.
Benchmark three-month copper on the London Metal Exchange was up 0.1% at $14,420 a metric ton in official open-outcry trading, having added 1.1% on Monday.
“Copper is drawing support from the stronger mood in equity markets, with the rally in tech stocks adding to optimism about future demand from data centres and power infrastructure,” said Ewa Manthey, commodities strategist at ING.
European and Asian stocks climbed on Tuesday after a tech-fuelled rally lifted the Nasdaq to a record close.
Growth in the AI and defence sectors will boost copper demand by 50% by 2040, consultancy S&P Global has said. Data centres need copper for wiring and power.
LME copper hit record high last month
LME copper has climbed 16% so far this year but has eased from a record peak of $14,875 hit on September 10.
Over the last three sessions, it has found technical support at the 50-day moving average of $14,253.
The Shanghai Futures Exchange was closed for China’s National Day and will reopen on October 8, when the market will be closely watching the return of Chinese buyers.
“With Chinese markets closed for the holiday, trading is thinner than usual, so we’ll need to see whether the gains hold when activity returns,” Manthey added.
Also supporting industrial metals was a slightly weaker dollar index making dollar-denominated commodities cheaper for buyers using other currencies.
LME aluminum gained 0.7% in official activity to $3,148 a ton. Prices for the metal used in construction, packaging, and transport have fallen by more than 17% since hitting a four-year high in June, weighed by easing worries about supply from the Gulf region and expectations of new production capacity in Indonesia.
Among other metals, zinc climbed 0.6% to $3,765 a ton, lead added 0.1% to $1,878 and tin rose 0.1% to $54,390, while nickel lost 0.1% to $15,700.
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