Dollar, inventories weigh on copper prices
- Benchmark copper was down 0.7% at $8,804 a tonne.
- Stocks of copper in LME registered warehouses rose 10,500 tonnes to 142,550 tonnes, a rise of more than 90% since the start of March.
LONDON: Copper prices fell on Tuesday as a firmer dollar and higher inventories triggered a bout of selling while the market looked ahead to surveys of manufacturers in top consumer China.
Benchmark copper was down 0.7% at $8,804 a tonne at 1052 GMT. Prices of the metal used widely in power and construction have fallen 8% since hitting 9-1/2 year highs of $9,617 last month.
"There's no real fundamental news. The dollar is up, so are copper stocks and funds are selling," a metal trader said. "Manufacturing PMIs towards the end of this week should give us clues to future demand.
INVENTORIES: Stocks of copper in LME registered warehouses rose 10,500 tonnes to 142,550 tonnes, a rise of more than 90% since the start of March.
Rising stocks have eased concern about availability on the LME market and narrowed the discount for the cash over the three-month contract to around $2 a tonne from nearly $50 a tonne at the beginning of March.
DOLLAR: A rising US currency makes dollar-priced metals more expensive for holders of other currencies, which could subdue demand.
This is a relationship used by funds to generate buy and sell signals from numerical models.
TECHNICALS: Support for copper prices kicks in at $8,550, the 55-day moving average, while resistance is at $8,982 where the 21-day moving average currently sits.
CHINA: Surveys of manufacturing activity in China later this week are expected to show activity expanded more quickly in March.
INFRASTRUCTURE: Investors were looking forward to details of a large US infrastructure bill later this week, which could boost demand for metals, but is also likely to include tax increases.
ALUMINIUM: Aluminium prices in China will remain high in 2021, the president of state-run Chalco said, as a crackdown on energy use in Inner Mongolia leaves a question mark over supply.
OTHER METALS: Aluminium was down 0.6% to $2,252 a tonne, zinc fell 0.3% to $2,820, lead was up 1.0% at $1,976, tin was flat at $25,350 and nickel gained 0.6% to $16,305.
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