Copper set for first weekly gain since April on US debt deal progress
Copper prices climbed on Friday, heading for their first weekly gain since April, supported by a weaker dollar, as investors cheered the passing of the U.S. debt ceiling bill.
Three-month copper on the London Metal Exchange CMCU3 was up 0.3% to $8,271.50 a tonne by 0411 GMT. The contract has gained 1.7% so far this week, reversing a six-week decline.
The U.S. Senate on Thursday passed the bipartisan legislation backed by President Joe Biden that lifts the government’s $31.4 trillion debt ceiling.
Worries over a potential first-ever default had previously dragged down the global risk asset market.
The news, together with expectations of an interest rate pause by the Federal Reserve this month, sent the dollar to a one-week low, making it more attractive for buyers of the greenback-priced commodity.
Among other metals, LME aluminium CMAL3 added 0.2% at $2,286 a tonne, tin CMSN3 was up 1.1% to $25,720, nickel CMNI3 climbed 0.7% to $21,460, zinc CMZN3 moved 1.4% up to $2,297.50 and lead CMPB3 climbed 0.5% to $2,008.
“Strengthening risk sentiment, lowered stocks in China and higher premium are forming support to short-term prices,” said analysts at Guangda Futures in a note.
The most-traded July copper contract on the Shanghai Futures Exchange SCFcv1 was up 1.3% at 66,140 yuan ($9,568.73) a tonne.
Still, copper faced downside pressure stemming from recession risks, a lack of solid demand growth in top consumer China, as well as rising domestic supply on the back of ample raw materials.
Copper treatment and refining charges (TC/RCs) AM-CN-CUCONC have been at a four-year high at $87.50 since last Thursday.
Miners pay TC/RCs to smelters to process copper concentrate into refined metal, offsetting the cost of the ore. The charges rise when more concentrate is available.
SHFE aluminium SAFcv1 gained 1.5% to 18,450 yuan a tonne, zinc SZNcv1 ticked up 0.9% to 19,260 yuan, nickel SNIcv1 jumped 3.8% to 162,610 yuan, tin SSNcv1 rose 1.9% at 210,850 yuan, while lead SPBcv1 shed 0.5% to 15,055 yuan.
Source: Reuters (Reporting by Siyi Liu and Dominique Patton; Editing by Sherry Jacob-Phillips and Sohini Goswami)