Shanghai copper prices gained ground on Tuesday amid a persistent weak dollar, even as official data showed China churned out a record volume of refined copper in December, suggesting the world's biggest copper consumer is well supplied. The most-traded March copper contract on the Shanghai Futures Exchange (ShFE) closed up 0.2 percent at 53,720 yuan ($8,395.06) a tonne.
ShFE nickel and lead came alive after the mid-session interval, with nickel clocking a 1.7 percent rise to 99,720 yuan a tonne at the close, and lead gaining 1.9 percent amid tight stocks to end at 19,800 yuan a tonne, its highest close since Oct. 18. A weak dollar makes metals cheaper for holders of other currencies and supports prices, and the greenback's dive as a result of the US government shutdown had seen copper climb by 0.4 percent in both Shanghai and London on Monday.
"We think the recent copper price rebound is mostly driven by dollar weakness," Argonaut Securities wrote in a note. "Any dollar weakness reversal may weigh down on copper prices, in our view." While China's refined copper output hit an all-time high in December, Argonaut noted that unwrought copper imports fell by 5 percent in 2017.
"The reduced import appetite reflects China's sluggish copper demand, especially in the power sector," it added. SHFE nickel "drifted in line with onshore weakness, but unlike iron ore it did find some regional physical demand into the morning sell-off, the uptrend remains in tact for now," Marex Spectron wrote in a note.
China's refined copper output jumped by 16.7 percent year-on-year to a record high in December, as smelters looked to churn out as much metal as possible ahead of a fall in treatment charges for copper concentrate. China's imports of scrap copper fell 19.8 percent in December from a year earlier, customs data showed on Tuesday, as the country continues a clampdown on taking foreign waste. China's central Henan province churned out more aluminium than neighbouring Shandong in 2017 for the first time in years, becoming the nation's top-producing region.
Comments
Comments are closed.