NEW DELHI: Copper prices touched a one-week high on Tuesday as a softer US dollar lent support, although further gains were likely to be capped ahead of key US inflation data.
Three-month copper on the London Metal Exchange (LME) was up 0.59% at $8,852 a tonne by 0925 GMT, after hitting $8,881.50 earlier, its highest since April 4.
Prices had declined 1.5% last week after weak US economic data fueled fears of a recession.
The US dollar gave back the previous day’s advances against the euro and pound but held some gains against the yen on Tuesday as traders’ attention turned to US inflation data due on Wednesday for signs of how close US rates are to peaking.
“If US inflation data this week is stronger than expected, further downside risk to prices persists,” analysts at National Australia Bank Limited said in a research note.
A weaker dollar is supportive as it makes dollar-priced metals cheaper for buyers holding other currencies. Among other metals, LME aluminium eased 0.24% at $2,328 a tonne, tin fell 1.43% to $23,960, zinc fell 0.18% at $2,774, nickel was up 2.63% at $23,400, while lead was up 0.14% at $2,098.50.
Meanwhile, China’s consumer inflation in March hit the slowest pace since September 2021, driven by falling food prices, official data showed on Tuesday, suggesting demand weakness persists amid an uneven economic recovery.
Producer deflation extended into a sixth month. The most-traded May copper contract on the Shanghai Futures Exchange was up 0.16% at 68,880 yuan a tonne.
Shanghai copper set for weekly losses amid economic headwinds
SHFE aluminium was down 1.04% at 18,485 yuan, zinc fell 0.58% to 22,125 yuan, lead edged 0.1% lower to 15,285 yuan, tin fell 1.45% to 190,730 yuan, and nickel gained 0.63% to 180,000 yuan a tonne.
Separately, production in Peru, the world’s No. 2 copper producer, is expected to be 2.8 million tonnes this year, a senior official said on Monday, representing an almost 15% jump from 2022, in a bright spot for the Andean nation’s top export.
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