LONDON: Prices of copper and other base metals were buoyed by a weaker dollar on Tuesday ahead of U.S. inflation data and concern over power-linked curtailments of smelters and tight inventories.
Three-month copper on the London Metal Exchange (LME) advanced by 0.9% to $8,027 a tonne by 1025 GMT for its highest since Aug. 25. It has gained 7% since touching a five-week low on Sept. 2.
“The tightness in copper is not going away. The price is recovering quite nicely despite all of the recessionary drums growing ever louder across the world and worries about China and continued lockdowns,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The premium for LME cash copper over the three-month contract surged to $150 a tonne on Tuesday, its highest since November 2021, indicating shortages of immediately available copper in the exchange warehouse system.
Weaker dollar lifts copper as market awaits China data
Markets expect a softening in U.S. inflation figures due at 1230 GMT, Hansen added.
“The recovery in risk appetite across markets has improved with the dollar weakness we’ve seen during the past four days and if we do get a weaker than expected CPI print, it could weaken the dollar further.”
The dollar on Tuesday was heading for its longest losing streak in a year.
A weaker dollar supports commodities priced in the U.S. currency by making them cheaper for buyers holding other currencies.
Aluminium prices were also lifted by news that China’s southwestern province of Yunnan has ordered producers of electrolytic aluminium to reduce power usage this week.
LME aluminium jumped 2% to $2,328.50 a tonne while zinc, another energy-intensive metal to have production curbed, climbed by 2% to $3,261.50.
LME tin rose 2.5% to $22,000 a tonne and lead added 1% to $1,968, but nickel was little changed at $24,580.
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