BEIJING: Shanghai copper prices rose on Wednesday to a seven-week high, with the demand outlook buoyed by China’s latest economic support and a subdued dollar amid expectations of an interest rate hike pause by the US Federal Reserve.
The most-traded July copper contract on the Shanghai Futures Exchange was up 1.4% at 67,920 yuan ($9,478.49) per metric tonne by 0138 GMT, its highest since April 25.
China’s central bank’s decision to cut short-term borrowing costs for the first time in 10 months came as the latest move by the country to support its economy, signalling potentially a rise in demand for industrial metals.
Upbeat sentiment sent three-month copper on the London Metal Exchange to a one-month high in the previous session, while the contract retreated 0.1% to $8,448 per metric tonne.
The dollar hovered around a three-week low on Wednesday, after the smallest annual increase in inflation last month in more than two years supported expectations that the Fed will pause rate hikes at its two-day meeting ending on Wednesday.
In China, refined copper output declined month-on-month in May because of smelters’ maintenance.
That, coupled with lower imports due to unfavorable market conditions, raised concerns of further supply tightness.
LME aluminium gained 0.3% to $2,237.50 a metric tonne, zinc added 0.3% to $2,237.50, while tin dipped 0.2% to $26,025, lead nudged down 0.1% to $2,078, and nickel dipped 0.2% to $21,915.
SHFE aluminium climbed 0.9% to 18,390 yuan a metric tonne, zinc rose 1.4% to 19,960 yuan, lead edged 0.2% up to 15,330 yuan, nickel jumped 3.4% to 166,650 yuan, and tin ticked up 0.8% to 211,430 yuan.
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