LONDON: Copper prices eased under pressure from a stronger dollar on Tuesday after US Federal Reserve Chair Jerome Powell was nominated for a second term, reinforcing investor expectations for higher interest rates in 2022.
Benchmark copper on the London Metal Exchange (LME) was marginally lower at $9,726 per tonne by 1730 GMT, snapping a three-session winning streak.
The dollar index against a basket of currencies hit a fresh 16-month high. A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies.
“We are on the policy course of taking off bond buying and raising rates and Powell’s (potential) reappointment confirms that path,” said WisdomTree analyst Nitesh Shah.
INVENTORIES: On-warrant copper stocks in LME-registered warehouses have climbed to 62,775 tonnes compared to 23,300 tonnes a month ago. But inventories on the LME are still down about 18% so far this year and are at near historically low levels.
PREMIUM: The replenished stocks have dragged down the premium of LME cash over the three-month contract price to $118 per tonne versus a record of $1,103.50 last month.
The scale of deliveries made by Chinese smelters have been less than anticipated given the backwardation over the last few months, said Alastair Munro at brokerage Marex.
“Market remains tight stocks wise,” he said.
CONGO COPPER: China’s Zijin Mining said its board had approved investment in a $769 million smelter for its Kamoa-Kakula copper project alongside Ivanhoe Mines in the Democratic Republic of Congo (DRC).
ZINC: Prices for the metal used to galvanise steel were down 1.6% to $3,294 a tonne after jumping 3.4% in the previous session on the closure of Glencore’s Portovesme plant in Italy.
OTHER METALS: LME aluminium shed 0.5% to $2,675 a tonne, lead lost 0.4% to $2,250, tin was down 0.1% at $38,860, while nickel was steady at $20,330.
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