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Wednesday, February 28, 2024

LME copper drops to 11-week low as dollar hits two-month high

Copper prices in London fell to a 11-week low on Thursday, as a firm dollar made greenback-priced metals more expensive to holders of other currencies.

Three-month copper on the London Metal Exchange (LME) fell 0.3% to $8,143 per metric ton by 0553 GMT. The contract hit $8,120 earlier in the session, its lowest since June 1.

The most-traded September copper contract on the Shanghai Futures Exchange fell 0.2% to 67,710 yuan ($9,253.92) a ton.

The dollar index touched a two-month high as a resilient US economy underscored the need for higher-for-longer interest rates. Property debt issues and weak data from China, the world’s second-biggest economy and biggest consumer of metals, have also been pressuring prices of copper, often used as a gauge of the global economic health.

But cushioning prices were China’s central bank injecting more liquidity into the market to support financial assets, and major state-owned banks selling dollars to buy yuan.

“The government is trying to support CNH (offshore yuan) from weakening too much too fast,” said a metals trader.

Copper hovers above seven-week low, zinc slumps

LME aluminium fell 0.5% to $2,132.50 per ton, nickel was almost flat at $19,810, zinc dipped 0.5% to $2,272.50, lead stayed almost unchanged at $2,121 while tin fell 0.9% to $24,850.

SHFE aluminium dipped 0.1% to 18,450 yuan a ton, nickel rose 0.5% to 163,460 yuan, zinc eased 1.2% to 19,860 yuan, lead advanced 0.1% to 16,040 yuan, and tin shed 1.1% to 209,700 yuan.

LME cash zinc flipped to a discount of $4.25 a ton over the three-month contract on Wednesday, after remaining in a premium zone since Aug. 3, indicating easing supply tightness.

Zinc inventories in LME-registered warehouses have surged to a 17-month high, highlighting a market surplus amid weak demand.

LME copper drops to 11-week low as dollar hits two-month high

Source: Brecorder

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