LONDON: Copper and aluminium prices rose in London on Wednesday as support from a weaker US dollar offset concerns about demand from top metals consumer China.
Three-month copper on the London Metal Exchange was 0.9% higher at $9,550 per metric ton in official open-outcry trading, reversing Tuesday declines caused by slower-than-expected China’s industrial output growth.
The metal, used in power and construction, is up 11.5% since the start of 2024 after its March-April rally drove the price to $9,640.50, the highest level since June 2022, on Monday.
The dollar edged down but was still close to its 5-1/2-month high after Federal Reserve officials reiterated interest rates are likely to stay higher for longer. Weaker US currency makes dollar-denominated metals more attractive to buyers using other currencies.
LME aluminium added 0.1% to $2,563 a ton in official activity as the market kept digesting the US and Britain’s move to ban the LME and CME from accepting newly produced Russian aluminium. Aluminium touched $2,728, a 22-month high, on Monday.
As China’s unwrought aluminium exports to the US have been tiny in recent years, the market largely ignored the news that US President Joe Biden would call for sharply higher tariffs on Chinese steel and aluminium as part of a package of policies aimed at pleasing steelworkers in the swing state of Pennsylvania.
However, the Biden administration would also press Mexico to prohibit China from selling its metal products indirectly through the US’s southern neighbour. Uncertainty about post-sanctions changes for overall Russian supply and delivery to the LME-registered warehouses may still cause some volatility in the metal in coming days, said ING commodities analyst Ewa Manthey.
“However, we think the market will adapt to the new dynamics while Russian material will continue to find new sanction-neutral buyers,” she added.
For now, LME data showed that investors gave notification over the last two days they wanted to remove nearly 90,000 tons of aluminium from the warehouses in Gwangyang, South Korea, which traders say is a popular location to store Russian material.
Zinc rose 1.2% to $2,805, lead gained 0.5% to $2,159, tin was up 1.1% at $32,165, and nickel added 1.6% to $18,000.
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