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Copper prices increase on weaker dollar, China stimulus

Copper prices rose on Tuesday on a weaker dollar and expectations for better metals demand after Chinese policymakers said they would accelerate infrastructure investment.

Three-month copper on the London Metal Exchange CMCU3 rose 0.7% to $7,707 a tonne by 0624 GMT, and the most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 advanced 1.9% to 61,220 yuan ($8,820.31) a tonne.

The dollar took a breather after a sweeping rally, making greenback-priced metals cheaper to holders of other currencies.

Officials in China, the world’s biggest metals consumer, said the third quarter of this year is crucial for rolling out stimulus measures and promised fresh policy actions to follow a stimulus package released in May. .

“Today’s main driver is weaker U.S. dollar,” said a metals trader, adding that the news about China’s policy support boosted the metals complex since Monday.

The premium of LME cash copper over the three-month contract MCU0-3 rose to $77.50 a tonne on Monday, the highest since December 2021, signalling tightening supply of immediately available material in the LME warehouses.

“There are some dominant holders of material out there that wants to push prices higher,” the trader said.

One party is holding 50%-80% of LME copper warrants 0#LME-WHL, exchange data showed.

Meanwhile, copper inventories in China bonded warehouses SMM-CUR-BON fell to their lowest on record at 142,200 tonnes.

In Peru, the world’s second-largest copper producer, copper output in July fell 6.6% year-over-year to 195,234 tonnes after two of the country’s largest mines underperformed.

LME lead CMPB3 rose 1.5% to $1,904 a tonne, aluminium increased 0.5% to $2,297.50 a tonne and zinc CMZN3 edged up 0.3% to $3,207.50 a tonne.

ShFE nickel SNIcv1 jumped 5.4% to 174,410 yuan a tonne, zinc SZNcv1 rose 2.2% to 24,285 yuan a tonne, tin SSNcv1 increased 2.2% to 178,590 yuan a tonne and aluminium SAFcv1 was up 1.1% at 18,450 yuan a tonne.

For aluminium, one party controls over 90% of available stocks and short-term futures on the LME.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Rashmi Aich and Uttaresh.V)

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