Cop­per price rises ahead of China party congress

Business World - - WORLD MARKETS -

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. —

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