LONDON — 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 on the London Metal Exchange (LME) advanced by 0.9% to $8,027 a tonne by 1025 GMT 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
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 on Tuesday was heading for its longest losing streak in a year.
A weaker dollar supports commodities priced in the U.S. currency by making them cheaper for buyers holding other currencies.
Aluminum prices were also lifted by news that China’s southwestern province of Yunnan has ordered producers of electrolytic aluminum to reduce power usage this week.
LME aluminum jumped 2% to $2,328.50 a tonne while zinc, another energy-intensive metal to have production curbed, climbed by 2% to $3,261.50.
LME tin rose 2.5% to $22,000 a tonne and lead added 1% to $1,968, but nickel was little changed at $24,580.
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($1 = 6.9249 yuan) (Reporting by Eric Onstad Editing by David Goodman)