Copper pulls back from 26-month high on stronger dollar - Inside Financial Markets

Copper pulls back from 26-month high on stronger dollar

London copper eased on Wednesday from a 26-month high hit in the previous session, as the U.S. dollar firmed and comments by a Peruvian government official eased concerns over supply from world’s No. 2 producer.

Three-month copper on the London Metal Exchange CMCU3 fell 0.1% to $6,682.50 a tonne by 0353 GMT, after rising to its highest since June 2018 on Tuesday.

The most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 shed 0.8% to 52,010 yuan ($7,612.82) a tonne.

“Today is all about liquidation and profit-taking,” said a Singapore-based metals trader, adding that a further price rally would need more government stimulus or construction activities outside of China, among other factors.

Making greenback-traded metals more expensive to buyers using other currencies, the dollar .DXY bounced off two-year lows on solid U.S. manufacturing data. (Full Story)

Adding further pressure on copper prices were comments from Peru’s vice minister of energy and mines that mining had almost completely recovered from the impacts of the COVID-19 pandemic. (Full Story)

Copper production in Peru fell only 2.2% year-on-year in July after plunging 20.4% in the first half of the year.

FUNDAMENTALS

  • LME nickel CMNI3 was set for an eighth straight session of gains, boosted by strong demand and tightening ore supplies in China. The contract rose 0.2% to $15,565 a tonne, while ShFE nickel SNIcv1 advanced 0.2% to 122,010 yuan a tonne.
  • Fitch Solutions raised its 2020 average price forecast for LME three-month nickel to $13,500 a tonne from $13,250.
  • “Prices will be supported over the remainder of 2020 as demand for nickel continues to find support from Chinese government stimulus to domestic industries and a recovery in economic activity in other countries,” it said in a note.
  • LME aluminium CMAL3 rose 0.1% to $1,818 a tonne, while ShFE aluminium SAFcv1 decreased 0.7% to 14,465 yuan a tonne.

Syed Zaki Hussain

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