LONDON, Sept 5 – Copper prices rose on Friday as a weaker dollar and hopes for stronger demand in China provided support ahead of a U.S. jobs report later in the session that may provide more clarity on the U.S. interest rate trajectory.
Three-month copper on the London Metal Exchange rose 0.4% to $9,939.50 per metric ton by 1023 GMT. The contract touched a five-month high of $10,038 on Wednesday on mounting expectations of the U.S. interest rate cut later in the month.
Lower interest rates improve prospects for growth-dependent metals, while a weaker U.S. currency, last down 0.3%, makes dollar-priced metals more attractive for other currency holders. Indicating that tight copper concentrate supply kept hitting smelters in Asia, one of Japan’s top copper smelters JX Advanced Metals said it was likely to cut copper production by tens of thousands of tons in the fiscal year ending in March.
In the U.S., inventories in the Comex-owned warehouses
already at their 22-year-high kept climbing up this week due to the remaining premium of the Comex copper futures against the LME benchmark, recently at 1-2%.
The premium saw a slump at the end of July as Washington excluded refined copper metal from its import tariffs on some copper products, but the fall has not been enough to cause an outflow from the U.S. stocks, a copper trader said.
Stocks in the LME-registered warehouses
were broadly stable, having risen 74% since late June, and keeping the discount for the cash over the three-month forward
at $67 a ton. “Even as copper remains distorted by the hangover of U.S. stock building, LME spread weakness has been suggestive of a loosening ex-China market but any price weakness appears to have been met by Chinese buying,” analysts at Macquarie said in a note.
The Yangshan copper premium
, which reflects demand for copper imported into China, was steady on Friday at its three-month high of $57 a ton.
Among other London metals, aluminium rose 0.5% to $2,603.50 a ton, zinc increased 0.6% to $2,860.50, lead climbed 0.4% to $1,993, tin gained 0.4% to $34,630, while nickel was up 0.3% at $15,270.
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