LONDON: Benchmark copper prices touched the highest in nearly a month on Friday, propelled by firmer demand in top metals consumer China, while U.S. prices held their premium over London ahead of expected U.S. tariffs.
Three-month copper on the London Metal Exchange (LME) was up 0.5% at $9,121 per metric ton by 1100 GMT, after touching $9,145, the highest since Dec. 12.
“The broader backdrop looks slightly bearish, but China looks good actually in terms of demand for base metals at the moment so that’s probably helping to push prices up a bit,” said Dan Smith, head of research at Amalgamated Metal Trading.
The most-traded February copper contract on the Shanghai Futures Exchange (SHFE) added 0.8% to 75,270 yuan ($10,264.73) a ton.
Firmer Chinese demand was highlighted by a spike in the premium paid over SHFE prices to buy copper in the spot market to 145 yuan, the highest since September and compared to a discount of 40 yuan on Dec. 30.
“The other thing is the fear about inflation is building, so that’s going to be good for metals generally,” Smith added.
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U.S. Comex copper futures gained 0.5% to $4.33 a lb, or $9,546 per ton, a premium of $425 a ton over the LME.
Comex prices reflected investors attempting to price in the impact of hefty tariffs that U.S. President-elect Donald Trump has vowed to impose on China and other countries.
Also helping to support base metals was a slightly weaker dollar index, taking a breather from recent strength underpinned by elevated bond yields and expectations of another strong set of U.S. job numbers later on Friday.
A weaker dollar makes it less expensive for holders of other currencies to buy greenback-priced commodities.
Among other metals, LME aluminium rose 1.6% to $2,579 a ton, nickel added 0.1% to $15,490, zinc climbed 1.6% to $2,894, lead gained 2.2% to $1,969 and tin advanced 0.8% to $30,100.
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