Copper rises on weaker dollar, upbeat risk sentiment

Article content

Copper and most other industrial metals rebounded on Wednesday as the dollar weakened, while strong U.S. company earnings and easing recession fears boosted investors’ appetite for riskier assets.

Three-month copper on the London Metal Exchange rose 1.8% to $7,408 a tonne by 0702 GMT.

The most-traded August copper contract on the Shanghai Futures Exchange ended daytime trading up 0.6% to 56,840 yuan ($8,419.74) a tonne.

“This push up (in metals) is just a reflection of higher risk appetite after last night’s U.S. equity rally. In addition, there is some USD weakness that is supporting commodities,” a Singapore-based metals trader said.

Article content

“I think copper will test the $7,475 level and break past it this afternoon and use the level as a temporary base for the rest of week.”

Asian shares extended a global rally, as the expected resumption of Russian gas supply to Europe helped lift sentiment and ease fears of a recession.

Copper, used in power and construction and often seen as a gauge for global economic health, fell below $7,000 a tonne for the first time since November 2020 last week on demand worries due to slowing economic growth in top consumer China and elsewhere.

DOLLAR: The U.S. dollar extended its losing streak to a fourth day to hover near two-week low, making greenback-denominated metals less expensive for other currency holders.

RATES: China kept its monthly benchmark lending rates for corporate and household loans unchanged, matching market expectations.

Article content

COPPER: Chilean miner Antofagasta Plc lowered its full-year copper output target following a leak in an underground pipeline that transports concentrate from its flagship project.

DATA: New U.S. home-building activity fell to a nine-month low in June and permits for new construction projects slipped as well, the latest indication of a cooling housing market as surging mortgage rates reduce affordability.

PRICES: LME aluminum rose 0.9% to $2,409 a tonne, zinc gained 0.9% to $2,973.50, nickel climbed 3% to $21,205, lead was up 0.3% at $1,993 and tin fell 1.3% to $24,500.

Shanghai aluminum eased 0.7%, zinc rose 1%, nickel jumped 5.6%, lead was down 0.1% and tin lost 1.2%. ($1 = 6.7508 Chinese yuan renminbi) (Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi Aich)