LONDON: Copper prices extended their gains on Tuesday as the dollar weakened and investors hoped that US data would show inflation was easing.
Three-month copper on the London Metal Exchange added 0.4% to $8,975 a tonne by 1115 GMT after climbing by 0.9% on Monday.
“The dollar is weaker as a result of optimism that the pace of inflation is weakening,” said Geordie Wilkes, head of research at Sucden Financial.
A softer dollar index makes commodities priced in the US currency less expensive for buyers using other currencies.
Copper poised for third straight weekly loss on weak Chinese demand
The most-traded March copper contract on the Shanghai Futures Exchange gained 0.8% to 68,680 yuan ($10,070.23) a tonne.
Global shares also rose ahead of US consumer price index data, due to be released at 1330 GMT, which is expected to show a rise of 6.2% in the 12 months to January, versus a rise of 6.5% in December.
Copper surged last month to a seven-month peak of $9,550.50 a tonne last month, largely on bets that the lifting of China’s strict COVID-19 controls would boost metals consumption.
Many analysts, including Wilkes, regard the rally as overblown since demand in top metals consumer China is still lacklustre.
“The reopening of the Chinese economy has not led to more consumption of materials and seems to be more focused on the consumer,” he said.
“It would be tricky to see a sustained rally at this point.”
Copper has been supported recently by disruptions at mines, including at the Grasberg mine in Indonesia, which operator Freeport-McMoRan hopes can be partially restarted before end-February.
LME aluminium advanced 0.4% to $2,421.50 a tonne despite LME data showing more inflows of inventories into LME approved warehouses, which have shot up 54% in about a week.
LME nickel rose 0.5% to $26,770 a tonne, zinc gained 0.5% to $3,112, lead edged up 0.2% to $2,101 while tin shed 0.1% to $27,510.
Comments
Comments are closed.