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Friday, January 27, 2023

Copper jumps to 2-week high on weak dollar, China reopening hopes

Copper prices on Thursday climbed to their strongest in two weeks, supported by a weaker dollar and signs that top metals consumer China was shifting away from its stringent COVID-19 curbs policy.

Three-month copper on the London Metal Exchange rose as much as 1.5% to $8,363 a tonne during Asian trading, its highest since Nov. 16, extending gains to a third session.

It was up 0.7% at $8,297, as of 0330 GMT.

On the Shanghai Futures Exchange, the most-traded January copper contract ended morning trade up 1.5% at 65,780 yuan ($9,301.34) a tonne.

Earlier in the session, it hit 66,050 yuan, its loftiest since Nov. 18.

Easing of Covid curbs in big Chinese cities like Guangzhou and Chongqing helped, with investors shrugging off data showing a contraction in China’s factory activity in November.

“We believe that Chinese authorities are shifting to a ‘living with COVID’ stance, as reflected in new rules that allow people to do ‘home isolation’ instead of being ferried away to quarantine facilities,” ANZ analysts said.

Copper moves higher on China demand hopes

The dollar index extended Wednesday’s more than 1% drop, dipping as low as 105.69 on Thursday, making greenback-priced metals cheaper for buyers using other currencies.

“Remarks from US Fed Chair Jerome Powell were received positively by markets, setting off a rally in bond markets and a sell-off in the US dollar,” ANZ analysts said in a note.

Powell signalled on Wednesday it was time to slow the pace of coming interest rate hikes following the Fed’s aggressive tightening moves to curb inflation.

LME aluminium edged 0.3% higher to $2,484 a tonne, zinc added 0.7% to $3,060, tin climbed 0.6% to $23,050, while lead slipped 0.2% to $2,189.50.

SHFE aluminium rose 1.4% to 19,115 yuan a tonne, nickel climbed 1.7% to 202,080 yuan, zinc advanced 2.6% to 24,430 yuan, and tin gained 1% to 186,860 yuan.

Copper jumps to 2-week high on weak dollar, China reopening hopes

Source: Brecorder

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