Copper eases as US dollar firms on inflation worries

HANOI — Copper prices fell on Monday as the dollar strengthened on worries over inflation in the United States that could lead to sooner-than-expected policy tightening.

Three-month copper on the London Metal Exchange was down 0.6% at $9,354.50 a ton by 0220 GMT, while the mosttraded August copper contract on the Shanghai Futures Exchange declined 0.9% to 68,280 yuan a ton.

The dollar held firm after slightly softer-than-expected US inflation did little to chip away investors’ conviction that the Federal Reserve could tighten monetary policy if consumer price pressures continue to intensify.

A stronger dollar makes greenback-priced metals more expensive to holders of other currencies.

China’s state planner said last week it will work with other departments to release state reserves of copper, aluminium and zinc at an appropriate time to boost market supply, lower firms’ cost pressures and guide prices to a return to normal ranges.

Meng Wei, spokesperson for the National Development and Reform Commission (NDRC), said that they had achieved preliminary results in curbing surges in commodity prices, and the NDRC will step up supervision on spot and futures markets and safeguard normal market order.

FUNDAMENTALS

Profit growth at China’s industrial firms slowed again in May as surging raw material prices squeezed margins and weighed on factory activity.

Shanghai Futures Exchange (ShFE) nickel inventories dropped to a record low of 6,106 tons, while LME nickel stockpiles declined to their lowest level since July 2020 at 234,576 tons.

Tin inventories in ShFE warehouses fell to their lowest since October 2020 at 3,418 tons.

$2,472.50 a ton and lead decreased 0.9% to $2,200 a ton.

ShFE aluminum edged up 0.2% to 18,855 yuan a ton, lead dropped 1.7% to 15,335 yuan a ton, zinc shed 0.6% at 21,780 yuan a ton and nickel declined 0.2% to 137,330 yuan a ton.