BEIJING: Copper prices climbed on Friday to their highest in nearly five months, as US inflation data bolstered hopes for a slower pace of interest rate hikes in the world’s largest economy that would support industrial metals demand.
The softer-than-expected data also sent the dollar sharply lower overnight.
A weaker dollar makes greenback-priced metals cheaper for buyers holding other currencies.
Three-month copper on the London Metal Exchange was up 1% at $8,354.5 a tonne, as of 0212 GMT, hitting the highest since June 16. The most-traded December copper contract on the Shanghai Futures Exchange advanced 1.8% to a four-month high at 67,830 yuan ($9,445.89) a tonne.
US consumer prices rose less than expected in October, pushing the annual increase below 8% for the first time in eight months, the strongest signs yet that inflation was slowing, which would allow the Federal Reserve to scale back its hefty interest rate hikes.
Sharp interest rate hikes by global central banks to tame soaring inflation have pressured risk assets this year, with copper prices down 21.8% from a March high.
Copper prices fall as worries over Chinese demand increase
Among other factors supporting the copper market, global supplies remained tight. Copper inventories on LME warehouses dropped 950 tonnes, trimming headline levels to 80,025 tonnes, the lowest in 7-1/2 months.
Among other metals, SHFE tin jumped 6.4% to 179,270 yuan a tonne, nickel rose 4% to 206,170 yuan a tonne, aluminium gained 1% to 18,735 yuan a tonne, and zinc climbed 0.6% to 23,725 yuan a tonne.
LME aluminium was up 0.7% at $2,343 a tonne, zinc rose 1.2% to $2,919.50 a tonne and tin climbed 2.3% to $20,800 a tonne, while lead dipped 0.5% to $2,088.50 a tonne.
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