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Wednesday, May 31, 2023

Copper slips as firm dollar, economic uncertainty weigh

Copper and most other base metals in London edged down during Asian trading hours on Thursday, with a firm dollar and economic uncertainty weighing on sentiment.

Three-month copper on the London Metal Exchange was down 0.3% at $8,980 a tonne, as of 0503 GMT, after three straight days of gains.

Receding fears of a full-blown banking crisis have revived overall investor risk appetite this week, but the dollar’s advance dented the appeal of greenback-denominated metals to buyers with other currencies.

This week’s rebound in metal prices have also been curbed amid the uncertain economic backdrop, analysts said.

“Inflation remains high, with central banks likely to keep tightening monetary policy.

The speed of China’s economic recovery has also been disappointing,“ ANZ commodities strategists said in a note. China’s factory activity likely grew at a slower pace in March, a Reuters poll showed on Wednesday, suggesting the economic recovery is uneven in the light of weak global demand and a property slump.

“Nevertheless, there are growing expectations that the copper market will tighten as the headwinds ease.

This could be exacerbated by the low level of inventories,“ the ANZ strategists said.

The most-traded May copper contract on the Shanghai Futures Exchange (SHFE) ended morning trade 0.3% higher at 69,570 yuan ($10,093.14) a tonne.

Copper edges higher as banking fears ease

Copper inventories in warehouses monitored by SHFE were down 11.6% last Friday, falling for a fourth consecutive week to 161,152 tonnes.

LME aluminium fell 0.1% to $2,377 a tonne, zinc gained 0.1% to $2,969.50, nickel dipped 0.1% to $23,730, lead shed 0.5% to $2,128.50, while tin was little changed at $25,810.

In Shanghai, aluminium was virtually flat at 18,685 yuan a tonne, zinc added 0.7% to 22,890 yuan, nickel fell 2% to 177,500 yuan, tin lost 0.3% to 206,040 yuan, while lead edged down 0.2% to 15,260 yuan.

Copper slips as firm dollar, economic uncertainty weigh

Source: Brecorder

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