Copper prices advanced on Tuesday as the dollar paused for breath ahead of highly-anticipated testimony from U.S. Federal Reserve Chairman Jerome Powell, making greenback-priced metals cheaper for holders of other currencies.
The dollar has gained sharply since the Fed last week flagged sooner-than-expected interest rate hikes, but dipped on Monday as markets looked to Powell’s testimony for further guidance.
Three-month copper on the London Metal Exchange CMCU3 was up 0.2% at $9,201.50 a tonne, as of 0543 GMT, while the most-traded July copper contract on the Shanghai Futures Exchange SCFcv1 advanced 0.9% to 67,360 yuan ($10,418.21) a tonne.
“If the (ShFE) price remains below 70,000 this week, downstream purchases may still be relatively active, which may form a certain supporting effect on copper prices,” said Huatai Futures in a note.
“But on the other hand, the pressure on the supply side is relatively high, mainly due to the pressure of state reserves selling and the continuous rebound of treatment charges prices,” the company said, adding that copper was expected to be volatile in the coming sessions.
The global world refined copper market showed a 19,000 tonnes deficit in March, compared with a 108,000 tonnes surplus in February, the International Copper Study Group said.
The global nickel market deficit narrowed to 15,600 tonnes in April from a shortfall of 17,100 tonnes in March, International Nickel Study Group data showed.
The speculative net long in ShFE copper declined to 5.1% of open interest on Monday, the lowest since Nov. 19 and was down from 7.3% on Friday, Marex Analytics data showed.
LME nickel CMNI3 rose 1.5% to $17,705 a tonne and ShFE nickel SNIcv1 climbed 3% to 132,020 yuan a tonne. ShFE aluminium SAFcv1 advanced 1.3% to 18,580 yuan a tonne and ShFE tin SSNcv1 rose 1.5% to 201,630 yuan a tonne.
Source: Reuters (Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips, Aditya Soni)
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