LONDON: Copper prices touched a three-week high on Friday, boosted by declines in Chinese inventories and concerns about supply of raw materials after a treatment charge deal was agreed.
Three-month copper on the London Metal Exchange (LME) climbed 0.9% to $9,153 per metric ton by 1045 GMT, having touched $9,178, the strongest since Nov. 15.
News on Thursday that Chilean miner Antofagasta and Jiangxi Copper agreed to significantly lower copper concentrate processing fees for 2025 highlighted concerns about sufficient availability of copper concentrate in the spot market.
“For 2025, we’ll probably see smelters struggle to make profits at the new TC/RCs (treatment and refining charges). Supply issues will start to bubble up in the second half of 2025,” said Daria Efanova, head of research at broker Sucden Financial.
Some investors were closing out positions ahead of the year-end and the rising copper price sparked some short-covering by speculators, Efanova added.
LME copper barely changed as traders await fresh triggers
Although copper has shed 10% since touching a four-month peak of $10,158 on Sept. 30, it has rebounded after sinking to $8,904 on Monday.
The market has also been bolstered by a steady erosion of inventories on the Shanghai Futures Exchange (SHFE), which registered another 10% decline in weekly data on Friday, bringing the total fall since early June to 71%.
The most-traded January copper contract on SHFE closed 0.2% higher at 74,730 yuan ($10,293.25) a ton and gained 1% for the week.
Efanova said the copper market was also focused on the dollar, which has recently been weakening, making commodities priced in the U.S. currency less expensive for buyers using other currencies.
The dollar index was slightly firmer on Friday with markets focused on U.S. payrolls data later on Friday to see if it challenged or cemented expectations of a Federal Reserve rate cut this month.
Among other metals, LME aluminium lost 0.9% to $2,616 a ton, zinc fell 0.7% to $3,096.50, lead dipped 0.2% to $2,094, while nickel advanced 0.6% to $16,065 and tin gained 0.6% to $29,335.
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