Copper pushes higher on Chinese buying, capped by firm dollar

LONDON: Copper prices extended gains for a sixth session on Tuesday as top metals consumer China stocked up ahead of holidays, though a stronger dollar dampened the rise.

Benchmark three-month copper on the London Metal Exchange was up 0.7% at $14,770 a metric ton by 0930 GMT, having gained 1% in the previous session.

LME copper has climbed 18% so far this year, mostly due to large flows of metals to the US on speculation about tariffs on refined copper.

Copper hit a record peak of $14,875 on September 10, then tumbled after sources told Reuters that US officials were concerned that tariffs may raise costs for manufacturers.

“Copper is finding support from tightening physical market conditions in China,” said Ewa Manthey, commodities strategist at ING.

“Falling inventories, seasonal restocking demand and constrained spot availability are offsetting the stronger dollar and tariff uncertainty.”

The most-traded copper contract on the Shanghai Futures Exchange rose 1.2% to 111,320 yuan ($16,616) a ton, also helped by renewed speculative support.

“Chinese are buying ahead of holidays and smelter shutdowns,” Sandeep Daga, head of research at Metal Intelligence Centre, said. The country’s upcoming holidays run from September 25 to 27 and from October 1 to 7.

Copper inventories in warehouses monitored by SHFE have slid 70% since early June.

Prices may be approaching a ceiling, said Robert Montefusco at broker Sucden.

“I think it’s a little bit inflated up here. If it gets any higher, I think a lot of the producers in China are going to start selling because they’re not convinced it’s going to stay this high,” Montefusco said.

Traders were awaiting a meeting between US President Donald Trump and Chinese President Xi Jinping later this week for signals on trade ties and the global economic outlook.

Among other metals, LME aluminium dipped 0.2% to $3,261 a ton, zinc rose 0.5% to $3,944, lead edged up 0.2% to $1,940, nickel gained 1.3% to $16,525 and tin ticked 0.2% higher to $54,030.