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Copper to gain weekly on dollar weakness and China demand

The copper price rose on Friday, and was on track to gain a week-long increase. This was due to a lower dollar and the expectation of higher demand from China, which is a major consumer.

As of 0750 GMT, the London Metal Exchange reported that three-month copper was up 0.3%, at $9,714 metric tons.

The Shanghai Futures Exchange's most-traded copper contract rose by 0.1%, to 78 490 yuan per ton ($10 929.02).

Data released Thursday showed that China’s exports exceeded forecasts in July as manufacturers took advantage of the fragile tariff truce, between Beijing and Washington, to ship goods.

China's imports of copper rose by 3.4% compared to a month ago, according to data released Thursday. Copper concentrate imports also increased by 9%, as the smelting industry snapped up supplies during a record-breaking run.

Meanwhile, the dollar index was down 0.4% against its rivals, making greenback-denominated assets more affordable to holders of other currencies.

Investors were watching closely the developments around the El Teniente Copper Mine in Chile, the top copper producer after a fatal incident last week affected production.

Two sources familiar with the matter confirmed that Codelco, the mine owner, has asked Chile's mining regulator for permission to reopen part of its flagship gold mine.

In the short-term, spot prices could rise as disruptions in mine supply bite. The treatment fees will also be pushed down. China's imports of refined copper will probably grow," ANZ analysts wrote in a Friday note.

Other metals in London rose by 0.3%, to $2.617.50 per ton. Nickel fell by 0.1%, to $15,100. Lead dropped 0.4%, to $2.001.50. Tin gained 0.4%, to $33,805. And zinc climbed 0.4%, to $2.825.

SHFE aluminium dropped 0.4% to 20685 yuan. Nickel eased 0.1%, to 121180 yuan. Lead fell by 0.1%, to 16,845 Yuan. Tin was up 0.1%, at 267 780 Yuan. Zinc was stable at 22,515 Yuan.

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(source: Reuters)