Copper price rises ahead of China party congress
LONDON — Copper rose on Wednesday to a one-month high, helped by a weaker dollar ahead of the release of the minutes of a US Federal Reserve meeting, with investors looking to a party congress in top metals consumer China due to begin next week.
Prices were likely to consolidate around current levels due to anticipated deficits in the supply of copper and most other industrial metals through the fourth quarter and into next year, said ING analyst Warren Patterson.
Benchmark copper on the London Metal Exchange (LME) closed up 0.60% at $6,801 a ton after touching $6,817.50, the highest since Sept. 8.
Copper and other metals have been driven higher by expectations of solid demand and a crackdown on polluting mines and smelters in China, the world’s biggest consumer.
Investors were looking for signals of China’s economic and environmental policy direction during a five-yearly party congress starting on Oct. 18.
Investors increased bets that metals prices will rise, with the net long position in LME copper seeing the first weekly rise since August in the week to Oct. 6. Net longs in zinc, nickel, aluminum and tin also increased.
A broad-based global economic upswing will likely be sustained this year and next, the International Monetary Fund said on Tuesday. Japan’s core machinery orders rose for a second straight month in August, beating market expectations.
The US Federal Reserve was to publish minutes from its September meeting later on Wednesday. A hawkish tone on interest rate rises could boost the dollar, making metals more expensive for holders of other currencies.
Japanese aluminum buyers will pay up to 21% less in import premiums in the October- December quarter to reflect a slide in spot premiums.
On- warrant stocks of zinc available to the market in LMEregistered warehouses rose by 7,025 tons to 132,500, taking the increase this month to 17%.
But the premium of cash zinc over the three- month contract reached a new 10-year high of $80 a ton, indicating shortages in immediately available supply. The global zinc market deficit widened to 39,600 tons and the global deficit in lead narrowed to 4,600 tons in August.
Zinc closed down 1.80% at $3,219 a ton, aluminum fell 1.50% to $2,130, nickel ended 0.70% higher at $11,135, lead finished up 0.30% at $2,565 and tin closed 0.70% higher at $20,870. —