Copper prices in London edged up on Friday as the dollar paused after gains, while investors awaited a highly-anticipated speech by U.S. Federal Reserve Chair Jerome Powell later in the day.
The speech could unveil plans on when or how fast the world’s biggest economy would reduce stimulus, which would impact the dollar and greenback-priced metals.
Three-month copper on the London Metal Exchange CMCU3 edged up 0.1% to $9,308 a tonne by 0640 GMT, while the most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 fell 0.3% to 68,870 yuan a tonne.
“Since the start of the COVID-19 pandemic, the negative correlation between copper and the U.S. dollar has strengthened, reaching levels last seen during the 2012 recession,” said Fitch Solutions in a note.
The slowdown in global economic growth momentum, the continued spread of the Delta coronavirus variant, higher supply and weakening Chinese demand will prevent copper from rebounding to its record high hit in May, Fitch Solutions said.
FUNDAMENTALS
* Profit growth at industrial firms in top metals consumer China hit the slowest pace this year in July as high raw material prices and supply chain constraints from extreme weather and sporadic cases weighed.
* China’s state reserves administration will also sell off 30,000 tonnes of copper, 50,000 tonnes of zinc and 70,000 tonnes of aluminium via public auction on Sept. 1, as part of efforts aimed at cooling high commodities prices.
* LME nickel CMNI3 fell 0.2% to $18,730 a tonne, zinc CMZN3 declined 0.9% to $2,976 a tonne and lead CMPB3 decreased 0.3% to $2,285 a tonne.
* ShFE aluminium SAFcv1 hit a 13-year high of 20,860 yuan a tonne while LME aluminium CMAL3 touched its highest since April 2018 of $2,649 a tonne on supply disruption risks, as five aluminium smelters in China’s Xinjiang region were told to impose output limits from August.
* Cancelled warrants of LME copper inventories MCUSTX-TOTAL, metals earmarked for delivery, hit their highest since July 2020 to 84,500 tonnes, latest data as of Wednesday showed.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; editing by Uttaresh.V)