Copper steadies on modest China reserves sale, but dollar weighs
Copper prices pared losses on Wednesday after tonnage was less than expected when China announced a second sale of state reserves, but a firmer dollar still weighed on the market.
Three-month copper on the London Metal Exchange was down 0.1% at $9,330 a tonne by 1000 GMT, after earlier falling to a low of $9,260.50.
China will sell 30,000 tonnes of copper and other base metals on July 29 as Beijing aims to rein in skyrocketing commodity prices, a government body said on Wednesday.
“There were rumors in the market that there would be a high number, but the announcement was lower than expectations,” said Wenyu Yao, senior commodities strategist at ING Bank.
“It’s quite a mixed picture this morning and copper has really been macro driven recently,” she added, referring to fears about rising COVID-19 cases and higher inflation.
The most-traded August copper contract on the Shanghai Futures Exchange closed up 0.2% at 68,020 yuan ($10,504.86) a tonne.
* The dollar index rose to its highest since early April, making metals priced in the U.S. currency more expensive to holders of other currencies.
* The Yangshan copper premium rose to $40 a tonne, its highest since May 7, indicating strengthening demand for imported metal into China.
* The global nickel market deficit widened to 21,300 tonnes in May compared a shortfall of 20,400 tonnes in April, data showed.
* The premium of LME cash lead over the three-month contract hit a near three-week high of $13.25 a tonne, indicating tightening nearby supply. LME inventories fell to a one-year low of 64,425 tonnes.
* LME aluminum shed 0.6% to $2,451.50 a tonne, zinc dropped 0.9% to $2,936, lead slipped 0.04% to $2,327, nickel shed 1.4% to $18,420 and tin gave up 0.4% to $33,365.
Source: Reuters (Reporting by Eric Onstad; Additional reporting by Mai Nguyen in Hanoi; Editing by Kirsten Donovan)