Copper rebounds on softer dollar, Middle East de-escalation hopes

BEIJING: Copper prices rebounded on Wednesday, as a softer dollar and renewed hopes of a de-escalation in the Middle East war bolstered demand prospects.

The most-traded copper contract on the Shanghai Futures Exchange rose 1.36% to 95,800 yuan ($13,916.13) per metric ton by 0153 GMT.

Benchmark three-month copper on the London Metal Exchange climbed 1.49% to $12,281 per ton.

Market sentiment broadly improved after US President Donald Trump said on Tuesday that the US was making progress in its efforts to negotiate an end to the war with Iran, including winning an important concession from Tehran.

“The expectation of de-escalation between the US and Iran has become a key force behind improved market sentiment,” analysts at broker Everbright Futures said in a note.

“It highlights the market’s vulnerability to geopolitical changes, but uncertainties are still there regarding the US-Iran negotiation.” Copper prices in both Shanghai and London lost ground on Tuesday as elevated energy prices amid a prolonged Iran war intensified concerns over inflation and global economic growth outlook.

A softer greenback, which makes dollar-priced commodities cheaper for buyers using other currencies, also lent support to the base metals complex. SHFE aluminium added 0.8%, nickel and lead advanced 0.55% each, tin climbed 3.94%, and zinc edged up 0.13%.

Among other LME metals, nickel rose 1.3%, lead gained 0.61%, tin added 3.03%, zinc advanced 1.13%, while aluminium eased 0.51%.