Copper rises as investors cheer Xi-Biden talks
Copper prices rose on Tuesday as the dollar weakened and risk sentiment improved on positive developments from a meeting between US President Joe Biden and Chinese leader Xi Jinping.
Three-month copper on the London Metal Exchange rose 0.4% to $9 711.50 a tonne by 05:14 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange edged up 0.2% to 71 070 yuan ($11 154.01) a tonne.
The dollar eased broadly against riskier currencies and the yuan scaled a five-month high, as talks between the two presidents seemed to have an amicable start.
Biden and Xi stressed their responsibility to the rest of the world to avoid conflict. Xi called Biden an "old friend" and said the two sides must increase communication and cooperation.
A weaker dollar makes greenback-priced metals cheaper to holders of other currencies.
"We are seeing risk appetite come back into metals markets, driven by positive sentiment from the virtual presidential summit and its impact on the two currencies," said commodities broker Anna Stablum of Marex Spectron.
"Concerns about the Chinese property markets are taking a step back for now," Stablum said, referring to a liquidity crisis in the massive sector than consumes a vast amount of metals including copper.
FUNDAMENTALS
- The premium of LME cash copper over the three-month contract fell to $32.50 a tonne, the lowest level since October 8, indicating that the tightness in nearby supplies has eased.
- ShFE nickel fell 1.6% to 144 190 yuan a tonne, zinc declined 1.4% to 22 855 yuan a tonne, aluminium shed 1.3% to 19 205 yuan a tonne and lead decreased 0.9% to 15 260 yuan a tonne.
- LME nickel rose 0.4% to $19 680 a tonne and zinc increased 0.5% to $3 232.50 a tonne.
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