METALS-Copper rises to near 10-year high on a weaker dollar

Copper prices rose to near their highest in a decade on Tuesday, as a weaker dollar made greenback-priced metals cheaper and more attractive to holders of other currencies.

Three-month copper on the London Metal Exchange CMCU3 rose as much as 0.8% to $9,453 a tonne, flirting with the $9,617-a-tonne level hit in February which was the highest since August 2011.

The most-traded June copper contract on the Shanghai Futures Exchange SCFcv1 hit 69,710 yuan ($10,732.87) a tonne, edging towards its highest since March 2011 of 71,080 yuan a tonne, touched in February.

The dollar =USD wallowed near a six-week low against its peers as U.S. bond yields have hovered below a 14-month peak touched last month.

“Copper is riding the wave of the U.S. dollar debasement in value,” said a Singapore-based metals trader, but noted that “physical participants are not biting (at current prices)”.

“Watch the inventories. Already there’s lending guidance on copper,” said the trader, referring to the dominant warrant holders in LME copper short-term contracts. 0#LME-WHC, 0#LME-WHT

One participant currently holds 50-80% of LME copper warrants 0#LME-WHL.

FUNDAMENTALS

* LME aluminium CMAL3 rose 0.4% to $2,339 a tonne at 0458 GMT, zinc CMZN3 advanced 0.8% to $2,869.50 a tonne and tin CMSN3 climbed 0.6% to $26,890 a tonne.

* ShFE aluminium SAFcv1 increased 0.4% to 18,150 yuan a tonne, nickel SNIcv1 dropped 0.8% to 120,970 yuan a tonne while lead SPBcv1 increased 1.3% to 15,255 yuan a tonne.

* The global nickel market surplus expanded to 6,200 tonnes in February from a downwardly revised surplus of 3,500 tonnes in the previous month, International Nickel Study Group data showed.

* China’s primary aluminium imports jumped over 15 times year-on-year in March on robust demand and favourable price spread between overseas metal and Shanghai prices.

* Russian metals producer Nornickel GMKN.MM has improved its 2021 production forecast slightly as one of its mines is resuming work ahead of schedule after flooding.
Source: Reuters (Reporting by Mai Nguyen; Editing by Shounak Dasgupta and Shailesh Kuber)