Friday, December 9

Copper eases on firm dollar ahead of US inflation data

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Copper prices fell on Thursday on a strong dollar, while waiting for US inflation data later in the day that could determine the size of any upcoming rate increase by the US Federal Reserve.

Three-month copper on the London Metal Exchange fell 0.1% to $7,541 a tonne by 0802 GMT, aluminum rose 1.6% to $2,342.50 a tonne, zinc rose 1.2% to $2,942.50 a tonne, while tin advanced 0.9% to $20,005 a tonne.

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The dollar was hovering near its multi-decade highs, making metals priced in the US currency expensive to holders of other currencies.

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The US inflation data due later on Thursday is expected to be strong, which would give the Federal Reserve more justification for raising interest rates.

Meanwhile, fears of recession in Europe, where the economy has been hit by an energy crisis, also weighed on the metals demand outlook and appetite for higher-risk assets.

China’s rising COVID-19 cases and its persistence in sticking to strict COVID-19 policies could pose some risks to demand, but consumption on the ground has been strong, especially from the wirerod sector, analysts and traders said.

Premium for copper imported into China has reached $128.50 a tonne, a one-year high.

Copper in the Chinese spot market, flipped to a discount of 225 yuan a tonne to ShFE prices on Wednesday, the biggest discount since April 2021, SMM data showed, as market participants switched to a new futures contract, said CRU analyst He Tianyu.

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The most-traded November copper contract on the Shanghai Futures Exchange closed almost flat at 62,340 yuan ($8,671.22) a tonne, nickel fell 0.4% to 178,910 yuan a tonne and zinc dipped 0.1% to 24,540 yuan a tonne.

The premium of LME cash aluminum over the three-month contract rose to $14.50 a tonne, a level unseen since Aug. 23, indicating tightness in immediately available supply, following news that the United States was considering banning the alloy from Russia, which produces about 6% of the world’s output.

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($1 = 7.1893 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Dhanya Ann Thoppil and Jane Merriman)