Copper set for weekly loss on stronger dollar, macro headwinds

SINGAPORE: Copper is on track to post a weekly loss on Friday, weighed down by a strong dollar and continued macroeconomic concerns, though dip buying limited the decline.

Benchmark three-month copper on the London Metal Exchange fell 1% to $13,137 a metric ton by 0300 GMT.

The most-traded copper contract on the Shanghai Futures Exchange stayed largely stable, edging up only 0.1% at 101,360 yuan ($14,900.84) a ton.

Copper was poised to end the week down by more than 3% on both exchanges.

The U.S. dollar gained 0.09%, partially reversing Thursday’s decline and making greenback-denominated commodities more expensive for buyers using other currencies.

Elsewhere, economic headwinds from the war in the Middle East helped push a key U.S. inflation indicator to its highest level in three years in May.

Inflation and higher interest rate expectations have persistently weighed on growth-dependent industrial minerals.

Lower Shanghai copper prices brought some buying interest back to the market on Thursday, providing support, Chinese broker Jinrui Futures, a subsidiary of copper producer Jiangxi Copper, wrote in a note.

China’s Yangshan copper premium, which reflects buying appetite in the world’s largest consumer, rose to its highest in three weeks.

Copper stocks on the LME continued to decrease while stocks on the CME increased.

Material has been pulled into U.S. warehouses ahead of a recommendation to President Trump to introduce tariffs on copper imports, due next week.

Aluminium largely shrugged off jitters in this week’s tentative Middle East peace after a cargo ship said it was hit by a projectile in the Strait of Hormuz.

On the LME, it dipped 0.32%, and on the SHFE, it lost 0.59%. Prices for the light metal have fallen 6% on the LME since the start of the week as the Middle East risk premium receded.

Among other LME metals, zinc fell 1.31%, lead lost 0.44%, nickel dropped 1.27% and tin decreased 2.52%.

Elsewhere on SHFE, zinc lost 1.17%, lead was little changed, up only 0.03%, nickel shed 1.91% and tin fell 2.02%.