Copper rises on weaker dollar, investors eye US inflation data

14th February 2023

By: Reuters


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Copper prices edged higher on Tuesday, as a weaker U.S. dollar made greenback-denominated metals more attractive to holders of other currencies.

Three-month copper on the London Metal Exchange CMCU3 rose 0.2% to $8,958 a tonne by 0803 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 gained 0.8% to 68,680 yuan ($10,070.23) a tonne.

The dollar slipped as investors braced for the U.S. consumer price index data due later in the day, amid tentative signs that inflation there is cooling.

"Commodity markets will be eagerly awaiting today's U.S. CPI data, which will shed some light on how much more work the U.S. Fed (Federal Reserve) has to do to bring down inflation," ING analysts said in a report.

Freeport-McMoRan cut its first-quarter copper sales forecast after heavy rains and landslides shut operations at its Grasberg mine in Indonesia over the weekend, with the mine not expected to be back online until the end of the month.

However, copper bulls are still exercising caution given the lack of speedy demand recovery in top consumer China.

"Following the end of the Chinese New Year holidays, there is a lack of consumption out of the region. Stimulus is not being realised, ... sentiment is also low, with consumer propensity to spend low," Sucden Financial said in a report.

"Metals are in contango, and with premiums low, underlying consumption is not yet there."

LME aluminium CMAL3 advanced 0.7% to $2,428.50 a tonne, while nickel CMNI3 fell 0.4% to $26,520 a tonne, zinc CMZN3 declined 0.3% to $3,087.50 a tonne and tin CMSN3 shed 1% to $27,250 a tonne.

SHFE aluminium SAFcv1 edged up 0.3% to 18,595 yuan a tonne, zinc SZNcv1 advanced 0.7% to 23,180 yuan and lead SPBcv1 increased 0.2% to 15,270 yuan, while tin SSNcv1 fell 0.7% to 215,480 yuan and nickel SNIcv1 dropped 2% to 207,190 yuan.

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Edited by Reuters


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