Copper up, heads for first monthly gain since May on Fed rate-cut expectations

BEIJING: London copper prices ticked up on Friday and were headed for their first monthly increase since May on rising prospects of an imminent US interest rate cut and better demand in China.

Three-month copper on the London Metal Exchange added 0.5% to $9,293.50 per metric ton by 0344 GMT.

The contract has gained 0.7% so far this month.

The most-traded October copper contract on the Shanghai Futures Exchange was little moved at 73,990 yuan ($10,434.06) a ton, up 0.7% so far this month.

Copper prices, often seen as an economic indicator, tumbled at the beginning of August when disappointing US jobs data fanned recession fears and roiled risk asset markets globally.

Subsequent economic reports eased those fears, helping the markets recover, with the focus shifting to the chances of the Federal Reserve lowering rates in September, which would likely brighten industrial demand.

Data on Thursday showed the US economy grew a little faster than expected in the second quarter, modestly reducing expectations for a larger 50 basis-point rate cut next month.

US inflation data later in the day will give traders further cues on the quantum of a rate cut.

This month also saw some declines in copper inventory in China as falling prices encouraged buying and also ahead of the fall season, when industrial activity traditionally picks up.

Shanghai Metals Market noted significant increases in China’s copper wire and cable exports, with a power crunch in Vietnam and an overall improving export market.

Chinese demand worries trigger funds sell-off in metals

LME aluminium climbed 1% to $2,482 a ton, nickel added 0.1% to $17,015, zinc moved 0.9% higher to $2,904, lead increased 0.4% to $2,044.50 and tin nudged 0.3% up at $32,450.

SHFE aluminium was up 0.1% to 19,790 yuan a ton, nickel was 0.1% higher to 131,750 yuan, zinc gained 0.3% to 24,080 yuan and tin nudged 0.2% higher to 264,260 yuan, while lead slipped 0.4% to 17,325 yuan.