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London copper falls on firm dollar, but outlook seen bright

London copper fell on Tuesday as a firm dollar made greenback-priced metals more expensive for holders of other currencies, but analysts were optimistic about the metal’s outlook due to U.S. stimulus and upcoming strong demand season in China.

Three-month copper on the London Metal Exchange CMCU3 declined 1.7% to $8,848.50 a tonne by 0634 GMT. Aluminium CMAL3 fell 2.1% to $2,124.50 a tonne and nickel CMNI3 shed 3.3% to $15,800 a tonne.

The dollar held near a 3-1/2-month high against its rivals as higher bond yields and expectations of faster economic normalisation from the COIVD-19 pandemic in the United States put the U.S. currency at an advantage.

A firmer dollar “to a certain extent put pressure on copper”, said analysts at Huatai Futures in a note.

However, the outlook for copper prices remained strong thanks to the upcoming traditional peak season for Chinese consumption in the second quarter and the United States’ $1.9-trillion stimulus bill plan, the analysts said.

FUNDAMENTALS

* Copper inventories rose to 84,250 tonnes, the highest since Jan. 21, in LME warehouses MCUSTX-TOTAL and were at a high level unseen since September 2020 of 163,025 tonnes in warehouses tracked by ShFE CU-STX-SGH.

* The most-traded April copper contract on the Shanghai Futures Exchange SCFcv1 closed down 0.7% at 66,000 yuan a tonne, aluminium SAFcv1 fell 2.1% to 16,990 yuan a tonne while nickel SNIcv1 dropped 3.4% to 119,240 yuan a tonne.

* For the top stories in metals and other news, click TOP/MTL or MET/L PRICES Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Most active ShFE nickel SNIcv1

Three month LME tin CMSN3 Most active ShFE tin SSNcv1

ARBS

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LMESHFALc3

LMESHFZNc3

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LMESHFNIc3
Source: Reuters (Reporting by Mai Nguyen; editing by Uttaresh.V and Aditya Soni)

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