Copper prices in London rose by 0.3% to $9,970 per metric ton, supported by reports of China expanding its strategic reserves of key industrial metals. The U.S. dollar’s strength influenced price dynamics, and overall, markets are observing cautious optimism with limited details available on China’s stockpiling plans.
On Friday, copper prices in London increased slightly, nearing the significant threshold of $10,000 per metric ton. This rise followed a report indicating that China intends to expand its strategic reserves of essential industrial metals, including cobalt, copper, nickel, and lithium. According to Bloomberg News, the National Food and Strategic Reserves Administration, responsible for managing official stockpiles, conducted price inquiries and bidding for these metals, although specific details regarding volumes or timing were not disclosed.
As of 0303 GMT, three-month copper traded on the London Metals Exchange (LME) registered a 0.3% hike, reaching $9,970 per metric ton. Despite the news on strategic buying, a trader commented that this development has minimal short-term impact on metals prices due to the absence of detailed information. Furthermore, the U.S. dollar strengthened, supported by the Federal Reserve’s signal that it does not plan to reduce interest rates in the immediate future.
The dollar index rose 0.03 to 103.82 as of 0238 GMT, following a 0.36% increase on Thursday. A stronger dollar increases the cost of dollar-priced metals for international buyers. In addition to copper, other metals displayed varying performance on the LME; aluminum rose 0.3% to $2,666 per ton, lead increased by 0.1% to $2,057.5, zinc was up 0.5% to $2,932, while tin saw a slight decline of 0.1% to $35,310. Nickel prices fell by 2.0% to $16,240 per ton.
In the Shanghai Futures Exchange (SHFE), copper gained 0.2% to 81,540 yuan ($11,252.64) per ton. Meanwhile, SHFE aluminum remained stable at 20,845 yuan per ton, while zinc increased by 0.6% to 23,895 yuan. Lead decreased by 0.5% to 17,590 yuan, nickel lost 0.3% to 129,890 yuan, and tin rose by 1.0% to 281,620 yuan. The exchange rate stood with $1 equaling 7.2463 Chinese yuan renminbi.
In conclusion, copper prices showed a modest increase amid news of China’s plans to boost its strategic reserves of key industrial metals. The broader influence on metal prices remains limited due to insufficient details. A strengthened U.S. dollar also poses implications for the cost of dollar-denominated metals in the global market. Overall, the market appears cautiously optimistic pending further developments in China’s stockpiling strategy.
Original Source: www.tradingview.com
