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Base metal prices set for weekly gains as demand worries fade

Base metals were set for weekly gains on Friday, as concerns about demand eased after softer-than-expected U.S. inflation data raised hopes of a less hawkish monetary policy.

Lead led the weekly gains, with its three-month contract CMPB3 on the London Metal Exchange up 6.7% as of 0524 GMT. The contract hit its highest since June 9 at $2,2210 a tonne on Friday.

LME copper CMCU3 gained 0.1% to $8,182 a tonne after having hit a six-week high in the previous session and was on track for a third weekly gain in four. Tin MSN3 has risen 2.5% so far in the week, while zinc CMZN3 was set for a fourth straight week of gains.

In a red-hot inflation environment, weaker-than-expected U.S. consumer price data released earlier this week raised hopes of less aggressive rate hikes in the world’s biggest economy, leaving room for more growth and metals demand.

A weaker dollar .DXY also helped metals prices – traded in the U.S. currency on the LME – by making them cheaper to holders of other currencies.

Meanwhile, Shanghai copper and nickel prices jumped, partly due to depleting exchange inventories and talks of China’s state stockpiling of the two metals, which could further tighten their availability, said a Beijing-based metal analyst.

“The two-day rally of nickel was mainly driven by rumour of stockpiling,” the analyst said, adding that prices would rise further if the government pursued the purchase.

Reuters could not verify the information.

The most-traded September nickel contract on the Shanghai Futures Exchange SNIcv1 hit its highest since Aug. 1 at 183,500 yuan ($27,244.52) a tonne.

ShFE copper SCFcv1 hit a six-week high of 62,920 yuan a tonne, lead SPBcv1 advanced 1% to 15,315 yuan a tonne and tin SSNcv1 jumped 3% to 204,620 yuan a tonne.
Source: Reuters (Reporting by Mai Nguyen; Editing by Sriraj Kalluvila and Subhranshu Sahu)

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