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Copper gains, but remains below the Monday peak due to a firm dollar

On Tuesday, copper prices rose on the back of continued mine disruptions. However, they remained below 16-month-highs reached in the previous session due to a stronger dollar.

In open-outcry official trading, three-month copper at the London Metal Exchange rose 0.4% to $10,696 per kilogram, after hitting its highest level since May 2024 at $10800 on Monday.

LME copper prices have risen 21% this year. Recent weeks saw a rise in price due to mine problems in Chile and Congo, as well as Indonesia.

Seven workers were killed in a mudslide disaster at the Grasberg copper mine, which is one of the largest mines in the world.

The El Teniente Mine in Chile and Kamoa-Kakula mine in the Democratic Republic of Congo have also experienced disruptions.

"The disruptions have been huge so I thought that copper would rise faster than it has, but the dollar is getting stronger," said Dan Smith.

One headwind that could explain why we aren't doing better is the slowdown of sales for electric vehicles in many places.

In the first half of this year, the average monthly EV sales in China grew by 36%, but that slowed to 6% in august.

Smith said that the LME copper price was nearing a band of resistance between $10,750 and just under $11,000 where it had failed to break out three times previously, in May 20,21, March 2020, and May 2024.

If we go backwards from here, the technical outlook is quite bearish."

The dollar index also benefited from the weaker euro and yen. A stronger dollar makes greenback-denominated assets more expensive for buyers using other currencies.

Other metals include LME aluminium, which fell 0.3% to 2,717.50 per ton. Nickel dropped 0.1% to $16,470, tin declined 0.7% to $35,550, zinc rose 0.6% to 3,025 and led added 0.1% at $2,007.

Golden Week, which runs from 1-8 October, is a time when Chinese markets will be closed.

Click or to see the latest news in metals, and other topics. (Reporting done by Eric Onstad. Additional reporting by Brijesh Patel in Bengaluru. Kate Mayberry, Mark Potter and Kate Mayberry edited the story.

(source: Reuters)