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By Eric Onstad
LONDON, Sept 13 (Reuters) – Prices of copper and other base metals were buoyed by a weaker dollar on Tuesday ahead of U.S. inflation data and concern over power-linked curtailments of smelters and tight inventories.
Three-month copper CMCU3 on the London Metal Exchange (LME) advanced by 1.7% to $8,090 a tonne in official open-outcry trading for its highest since Aug. 25. It has gained 7% since touching a five-week low on Sept. 2.
“The tightness in copper is not going away. The price is recovering quite nicely despite all of the recessionary drums growing ever louder across the world and worries about China and continued lockdowns,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The premium for LME cash copper over the three-month contract MCU0-3 surged to $150 a tonne on Tuesday, its highest since November 2021, indicating shortages of immediately available copper in the exchange warehouse system.
Markets expect a softening in U.S. inflation figures due at 1230 GMT, Hansen added.
“The recovery in risk appetite across markets has improved with the dollar weakness we’ve seen during the past four days and if we do get a weaker than expected CPI print, it could weaken the dollar further.”
The dollar =USD on Tuesday was heading for its longest losing streak in a year. MKTS/GLOB
A weaker dollar supports commodities priced in the U.S. currency by making them cheaper for buyers holding other currencies.
Aluminium prices were also lifted by news that China’s southwestern province of Yunnan has ordered producers of electrolytic aluminium to reduce power usage this week.
LME aluminium CMAL3 jumped 1.9% to $2,325.50 a tonne while zinc CMZN3, another energy-intensive metal to have production curbed, surged 3.1% to $3,297.
LME tin CMSN3 rose 2.5% to $21,990 a tonne, lead CMPB3 added 0.7% to $1,963 and nickel CMNI3 gained 0.5% to $24,700.
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TOP/MTL or MET/L
($1 = 6.9249 yuan)
(Reporting by Eric Onstad Editing by David Goodman, Kirsten Donovan)
((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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