Copper rises back towards 10-year high on weaker dollar

PUBLISHED: Tue, 20 Apr 2021 11:27:25 GMT
Mai Nguyen
Reuters
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HANOI, April 20 (Reuters) – Copper prices rose back towards their highest in a decade on Tuesday, as a weaker dollar made greenback-denominated metals cheaper and more attractive to holders of other currencies.

Three-month copper on the London Metal Exchange rose as much as 1.1% to $9,483 a tonne, flirting with the $9,617-a-tonne level hit in February which was its highest since August 2011. By 0716 GMT it was at $9,426.50, up 0.5%.

The most-traded June copper contract on the Shanghai Futures Exchange rose as high as 69,750 yuan ($10,737) a tonne, not far from its February peak of 71,080 yuan a tonne, which was its highest since March 2011. It closed up 1.1% at 69,450 yuan a tonne.

The dollar wallowed near a six-week low against its peers as U.S. bond yields hovered below a 14-month peak touched last month.

“Copper is riding the wave of the U.S. dollar debasement in value,” said a Singapore-based metals trader, but noted that “physical participants are not biting (at current prices)”.

“Watch the inventories. Already there’s lending guidance on copper,” said the trader, referring to the dominant warrant holders in LME copper short-term contracts.

One participant currently holds 50-80% of LME copper warrants.

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FUNDAMENTALS

  • LME aluminium rose 0.3% to $2,336.50 a tonne, zinc advanced 0.2% to $2,852 a tonne and tin fell 0.4% to $26,600 a tonne.
  • ShFE aluminium increased 0.1% to 18,095 yuan a tonne, nickel dropped 0.8% to 120,960 yuan a tonne and lead increased 1.6% to 15,300 yuan a tonne.
  • The global nickel market surplus expanded to 6,200 tonnes in February from a downwardly revised 3,500 tonnes in the previous month, International Nickel Study Group data showed.
  • China’s primary aluminium imports jumped over 15 times year-on-year in March on robust demand and a favourable price spread between overseas metal and Shanghai prices.
  • Russian metals producer Nornickel has lifted its 2021 production forecast slightly as one of its mines is resuming work ahead of schedule after flooding.

($1 = 6.4963 yuan)

(Reporting by Mai Nguyen; Editing by Shounak Dasgupta, Shailesh Kuber and Jan Harvey)