LONDON: Copper prices rose in London on Thursday as the US currency weakened, supporting demand for the dollar-priced metal from buyers using yuan and other currencies.
Three-month copper on the London Metal Exchange increased 0.8% to $8,419.5 per metric ton by 1120 GMT. Copper, used in power and construction, is up 0.6% so far this year due to the patchy post-pandemic recovery of demand in China, the world’s largest metals consumer, and concerns about the economic growth elsewhere. The downturn in euro zone business activity eased in November but remained broadbased.
“The rise in the yuan against the dollar has supported Chinese traders’ purchasing power in the international market, visible in the Yangshan premium’s yearly high,” said SP Angel metals associate Arthur Parish.
Yuan hovered around a four-month high against the dollar on Thursday. “Some front running ahead of a new wave of (China’s) property stimulus is also supporting buying,” he added. China’s government advisers call for steady growth target in 2024 and more fiscal stimulus, Reuters reported on Wednesday.
Meanwhile, the discount for near-term delivery versus the LME three-month copper contract broke through the $100 mark and reached $100.5 as of Wednesday market close, its fresh high since 1992 - indicating plentiful immediate supply. On the technical front, copper is facing resistance from the 200-day moving average at $8,459. LME nickel was up 0.5% at $16,520, stepping away from $16,280, its lowest since April 2021, touched earlier in the session.
Nickel is down 45% so far this year, making it the worst performer across the LME base metals, due to rising supply in Indonesia. The global nickel market had a surplus of 155,000 tons in January-September, the International Nickel Study Group said on Wednesday.
Aluminium fell 0.1% to $2,217.5, zinc climbed 1.4% to $2,530, lead fell 0.2% to $2,216.5, while tin fell 1.7% to $24,245.
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