Copper rises on supply risks and softening dollar
Copper prices rose on Tuesday, as supply risks flagged by major producers offset demand concerns, while a softening dollar made the metal cheaper for holders of other currencies.
Three-month copper on the London Metal Exchange rose 2.2% to $7 640/t by 07:09 GMT, while the most-traded September copper contract on the Shanghai Futures Exchange closed 3% higher at 58 890 yuan ($8 718.24) a tonne.
The dollar slipped for a fourth straight session as traders waited on a rate hike decision from the US Federal Reserve and for any clues about whether hints of a slowing economy will prompt a shift away from its focus on inflation.
Chinese miner MMG said on Monday it had suspended its copper production targets for the year following a 60% output drop due to a long protest at its Las Bambas mine in Peru, which significantly disrupted operations.
Last week, miners Vale and Antofagasta cut their 2022 copper production outlook.
“These miners … have been struggling to meet the bottom end of their guidance ranges and in some cases lowering below. That’s providing some offset to the slowing demand growth,” said CRU analyst Craig Lang.
Metals prices have been plagued by weak demand in top consumer China due to Covid-19 outbreaks and fears of a global economic slowdown as central banks seek to hike interest rates to control high inflation.
Despite Tuesday’s rise, prices of copper, often used as a gauge of global economic health, have dropped 30% since hitting a record high of $10 845 a tonne in March.
LME nickel CMAL3 advanced 2.5% to $22 790 a tonne, LME zinc CMZN3 increased 1.5% to $3 031.50 a tonne, ShFE nickel SNIcv1 climbed 6.4% to 174 360 yuan a tonne, and ShFE tin jumped 2.9% to 198 560 yuan a tonne.
Meanwhile, dozens of non-governmental organisations have sent a letter to Tesla CEO Elon Musk to not invest in the nickel industry in Indonesia, the world’s biggest producer of the metal, on environmental concerns.
