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Copper rises as inventories plunge to decades-low

Copper prices rose on Tuesday, buoyed by decades-low supplies and an extreme shortage of readily available metal in exchange warehouses.

Three-month copper on the London Metal Exchange CMCU3 rose 1.3% to $10,325 a tonne by 0531 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange SCFcv1 was almost unchanged at 75,620 yuan ($11,794.25) a tonne.

LME cash copper was at a record high $1,103.50-a-tonne premium over the three-month contract MCU0-3, compared to $55 just a week earlier, indicating tight nearby inventories.

“There seems to really be no copper around. (Trading) volumes have been monster, but with spreads this tight, some people are too frightened to get involved as there is too much at stake,” said commodities broker Anna Stablum of Marex Spectron.

“For once we are actually discounting macro here and just looking at micro.”

On-warrant LME copper inventories MCUSTX-TOTAL plunged to 14,150 tonnes on Friday, their lowest since 1998, before rising to 21,050 tonnes, with one entity controlling between 50% and 79% of LME copper warrants 0#LME-WHL, LME data showed.

A weaker dollar also made greenback-priced metals cheaper to holders of other currencies, and a Peruvian community threatening to block a key mining road used by MMG’s 1208.HK Las Bambas copper mine also supported prices.

FUNDAMENTALS
One party held more than 90% of available LME lead stocks and short-term futures 0#LME-WHT.

LME aluminium CMAL3 rose 0.6% to $3,186.50 a tonne, nickel CMNI3 advanced 0.7% to $20,140 a tonne and zinc CMZN3 increased 0.9% to $3,730 a tonne.

ShFE lead SPBcv1 rose as much as 2.7% to 15,990 yuan a tonne, its highest since Aug. 4, nickel SNIcv1 advanced 0.5% to 150,350 yuan a tonne and tin SSNcv1 increased 1.3% to 289,650 yuan a tonne.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu and Rashmi Aich)

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