Cop­per touches near three-year high as in­ven­to­ries slip and dol­lar weak­ens

Business World - - WORLD MARKETS -

JO­HAN­NES­BURG — Cop­per ral­lied to its high­est in three years on Tues­day as in­ven­to­ries in Lon­don and Shang­hai fell and the dol­lar sank af­ter North Korea raised geopo­lit­i­cal ten­sions by launch­ing a missile that flew over north­ern Japan.

Bench­mark cop­per jumped 1.90% to close at $6,791.50 ton. It ear­lier touched $6,843.50, a level last seen in Septem­ber 2014.

“The main in­put to cop­per is the con­tin­ued weak­ness of the dol­lar which has been par­tic­u­larly ag­gres­sive today,” said Ole Hansen, a com­modi­ties an­a­lyst at Saxo Bank, adding that fall­ing stocks had pro­vided un­der­ly­ing sup­port over the last week.

A weaker green­back gen­er­ally makes dol­lar-priced met­als cheaper for non-US in­vestors, boost­ing de­mand.

North Korea sharply es­ca­lated geopo­lit­i­cal ten­sions with the missile launch that drew a sharp re­ac­tion from Ja­panese Prime Min­is­ter Shinzo Abe.


In­ven­to­ries in ware­houses reg­is­tered by both the Lon­don and Shang­hai ex­changes showed de­clines. On-war­rant stocks — those not ear­marked for re­moval — in Lon­don Metal Ex­change shed 775 tons to 112,175 af­ter fresh can­cel­la­tions.

Weekly cop­per stocks in ware­houses reg­is­tered by the Shang­hai Fu­tures Ex­change de­clined by 8.20% to 187,444 tons.

Risky as­sets such as stocks fell while safe-haven gold jumped over 1% as ten­sions be­tween Wash­ing­ton and Pyongyang grew.

Three-month nickel on the Lon­don Metal Ex­change ended up 2% at $11,710. At one point the con­tract rose to $11,885, the high­est since Nov. 28, 2016.

The metal largely used to make stain­less steel is up 18% this year in Lon­don mainly on the back of sup­ply dis­rup­tions and higher steel prices.

“Nickel has sup­ply is­sues that are still play­ing out and that’s help­ing, par­tic­u­larly when we see steel prices go­ing up too,” said a com­modi­ties trader in Syd­ney.

In­done­sia on Tues­day agreed to let Freeport-McMo­Ran, Inc. keep op­er­at­ing its gi­ant Gras­berg cop­per mine, af­ter the US com­pany said it would cede con­trol of its In­done­sian unit, end­ing years of wran­gling.

US President Donald Trump last month re­jected a Chi­nese pro­posal to cut steel over­ca­pac­ity, de­spite the en­dorse­ment of some of his top ad­vis­ers, the Fi­nan­cial Times said, cit­ing peo­ple fa­mil­iar with the mat­ter.

Among other in­dus­trial met­als, alu­minum ended with gains of 1.20% to $ 2,095, lead ended 2.30% higher at $2,378, tin inched up 0.10% to $20,350, while zinc was 1.50% higher at $ 3,110. —

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