LONDON: Copper prices rose on Friday, supported by a weaker dollar and top metals consumer China pledging fiscal policy measures to strengthen economic growth.
Benchmark three-month copper on the London Metal Exchange was up 1.4percent at USD14,233 a metric ton in official open-outcry trading. Copper hit a six-month peak of USD14,396 on Monday due to worries about low inventories outside the US, but massive inflows into the LME-registered warehouses during the week helped ease some tightness. The premium of the LME cash copper contract over the benchmark slid to USD55 a ton on Friday from Monday’s USD436 as more metal became available for immediate delivery.
The dollar was set to end a bumpy week lower, as investors questioned whether the US Treasury’s efforts to calm the bond markets might end up undermining confidence in the currency. A weaker US currency makes dollar-priced metals more attractive for buyers using other currencies.
China’s yuan ended the week at a 3-1/2-year peak against the dollar, while the Yangshan copper premium, a gauge of China’s appetite for importing copper, rose 7percent to USD93 a ton. Copper inventories in warehouses monitored by the Shanghai Futures Exchange jumped 28percent this week.
A greater share of fiscal spending in China will be directed towards households and consumption, Vice Finance Minister Liao Min said, as policymakers seek to shore up weak domestic demand.
Among other LME metals, zinc added 1.7percent to USD3,823, its four-year high, while aluminium rose 1.2percent to USD3,242 in official activity.
Canada and the US are “very close” to agreeing to a trade deal that could help reduce months of tariffs, but more work remains to be done, a top Canadian official said. A source familiar with the talks previously told Reuters that a proposed deal could halve tariffs on Canadian aluminium to 25percent.
A reduced import tariff would “stem the flow of Canadian metal to Europe in favour of the US, but would still leave the US short, meaning the marginal tonne would still come in at a 50percent tariff,” Morgan Stanley said in a note. Lead fell 0.3percent to USD1,897, tin advanced 0.9percent to USD56,300 and nickel climbed 0.6percent to USD16,975.
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