LONDON: Copper prices hit a five-week high on Friday, on track to end August with 3 percent growth, on expectations of a cut to US interest rates and increased demand in September.
Three-month copper on the London Metal Exchange rose 0.6 percent to USD9,875 a metric ton in official open-outcry trading after touching its highest since July 25 at USD9,917. ‘Part of it is because the dollar is a bit weaker. But there has also been some strong data recently, such as upward revision of US second-quarter GDP growth,’ said Dan Smith at Commodity Market Analytics.
‘We are also heading for September, which tends to be a better month for demand than the summer period.’ The US currency was poised for a monthly retreat of 2 percent in August, making dollar-priced metals more attractive for buyers using other currencies.
In top metals consumer China, meanwhile, the yuan will register its biggest monthly gain against the dollar since May. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 2.4 percent this week while the Yangshan copper premium, which reflects demand for copper imported into China, stabilised at USD55 a ton, its highest since June 5.
In other LME metals, aluminium rose 0.4 percent to USD2,615 a ton in official activity, zinc added 1.2 percent to USD2,814, lead gained 0.1 percent to USD1,986 and nickel was up 0.7 percent at USD15,375.
Tin advanced 1.5percent to USD35,325 after touching USD35,390 for its highest in almost five months. Stocks in LME-registered and Shanghai-monitored warehouses are low, while market supply of tin ore is tight because Myanmar’s Wa State has yet to resume production, Marex said.
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