Copper prices increase on weaker dollar, China stimulus

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Copper prices rose on Tuesday on a weaker dollar and expectations for better metals demand after Chinese policymakers said they would accelerate infrastructure investment.

Three-month copper on the London Metal Exchange rose 1.3% to $7,750 a tonne by 0746 GMT, and the most-traded October copper contract on the Shanghai Futures Exchange advanced 2.6% to 61,630 yuan ($8,876.05) a tonne.

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The dollar took a breather after a sweeping rally, making greenback-priced metals cheaper to holders of other currencies.

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Officials in China, the world’s biggest metals consumer, said the third quarter of this year is crucial for rolling out stimulus measures and promised fresh policy actions to follow a stimulus package released in May..

“Today’s main driver is weaker U.S. dollar,” said a metals trader, adding that the news about China’s policy support boosted the metals complex since Monday.

The premium of LME cash copper over the three-month contract rose to $77.50 a tonne on Monday, the highest since December 2021, signaling tightening supply of immediately available material in the LME warehouses.

“There are some dominant holders of material out there that wants to push prices higher,” the trader said.

One party is holding 50%-80% of LME copper warrants , exchange data showed.

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Meanwhile, copper inventories in China bonded warehouses fell to their lowest on record at 142,200 tonnes.

In Peru, the world’s second-largest copper producer, copper output in July fell 6.6% year-over-year to 195,234 tonnes after two of the country’s largest mines underperformed.

LME lead rose 1.4% to $1,901.50 a tonne, aluminum increased 0.2% to $2,291 a tonne and zinc edged up 0.9% to $3,225 a tonne.

ShFE nickel jumped 5.6% to 174,800 yuan a tonne, zinc rose 2.4% to 24,330 yuan a tonne, tin increased 2.8% to 179,750 yuan a tonne and aluminum was up 1.4% at 18,505 yuan a tonne.

For aluminum, one party controls over 90% of available stocks and short-term futures on the LME.

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($1 = 6.9434 yuan) (Reporting by Mai Nguyen in Hanoi; editing by Rashmi Aich and Uttaresh.V)

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