BEIJING: Shanghai copper prices ticked up on Wednesday as US inflation data backed expectations for a Federal Reserve interest rate cut next month, although higher stocks kept gains in check.
The most-traded copper contract on the Shanghai Futures Exchange rose 0.43% to 79,280 yuan ($11,037.79) per metric ton by 0146 GMT.
The contract hit its highest level since July 25 at 79,510 yuan a ton earlier in the session.
Prospects of easing US monetary policy boosted sentiment across the sector, ANZ analysts said in a note.
The consumer price index (CPI) rose 0.2% last month after gaining 0.3% in June, data showed on Tuesday.
Economists polled by Reuters had forecast the CPI rising 0.2%.
Copper prices were also supported by news that China is planning to offer interest subsidies for businesses in eight consumer service sectors to boost consumption.
Gains were, however, capped by higher LME and SHFE copper stocks, said Matt Huang, an analyst at broker Bands Financial. Stocks in London Metal Exchange-approved warehouses have climbed by 11% so far in August, while SHFE copper warehouses stocks are up nearly 13%.
The rise came after US President Donald Trump excluded refined copper from the 50% import tariff effective August 1, ending a wave of front-loading cargoes to the United States to cash in on bumper premium.
“In the near term, the risk of a supply surplus is looming amid rising stocks.
Also, we have not heard many Chinese smelters cutting output yet,“ Bands Financial’s Matt said.
Benchmark three-month LME copper dipped 0.15% to $9,825.5 a ton after touching a more than two-week high on Tuesday boosted by a 90-day extension to a Sino-US trade truce.
SHFE aluminium climbed 0.68%, nickel advanced 0.52%, tin ticked up 0.45%, and zinc edged up 0.24%, while lead was little changed.
LME aluminium rose 0.15%, lead shed 0.1%, tin lost 0.18%, zinc slipped 0.12%, while nickel was flat. Reuters
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