LONDON: Copper prices drifted higher on Wednesday, rising for a fourth session in calmer markets after Russian foreign minister Sergei Lavrov downplayed a nuclear threat and as prices found technical support, though a stronger dollar capped gains. Three-month copper on the London Metal Exchange (LME) was up 0.6% at $9,139 per metric ton in official open-outcry trading.
Following the US presidential election won by Donald Trump, copper shed nearly 10% to a three-month low on Nov. 14 on worries about his plans to impose tariffs on top metals consumer China.
“That (the Trump trades) has all been priced in now, so the markets are waiting for the installation of Trump. We’re in a waiting period now,” said Tom Price, head of commodities strategy at Panmure Liberum. “Yesterday markets were looking at the risk around long-range US missiles, but markets have backed off and have settled down a bit.” Markets were rattled on Tuesday after news of Ukraine launching US-made ATACMS missiles into Russia and Moscow announcing it had lowered the threshold for nuclear action.
Russia’s Lavrov later downplayed the nuclear threat. Global shares rose as the cooling of tensions between Russia and the West injected some confidence among investors.
The most-traded December copper contract on the Shanghai Futures Exchange (SHFE) closed 0.7% higher at 74,550 yuan ($10,296.96) a ton. Capping the rise, however, was a firmer dollar index, making dollar-priced metals more expensive for buyers using other currencies. Some investors were dipping into the market after copper steadied in recent days following its losses.
“Copper bounced off a crucial technical level last week,” said Kyle Rodda, a senior financial markets analyst at Capital.com. “Concerns about Chinese demand remain present and will be difficult to shake off, while uncertainty persists about trade wars and the lack of Chinese stimulus.”
China has seen slowing economic growth and government policies so far haven’t managed to uplift investor confidence. LME aluminium climbed 1% to $2,672 a ton, rising for a second straight session, supported by news last week that China will cancel the 13% export tax refund for some aluminium products starting Dec. 1. LME nickel rose 1.4% to $16,085 a ton, zinc added 1% to $2,981, lead gained 2% to $2,041 and tin advanced 1.5% to $29,300.