New Delhi: Copper prices fell on Tuesday as rising coronavirus cases strengthened the dollar and cast doubt on a speedy rebound of some economies, while the plentiful supply of the metal also sapped its appeal.
Three-month copper on the London Metal Exchange shed 0.3% to $9,352 per tonne by 1651 GMT after falling as low as $9,236. This was the metal’s fourth straight session of declines.
“The market is in a wait and see approach and is lacking a major driver so the currency is leading metals trading,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity.
The ruling Communist Party in top metals consumer China is hosting its centenary celebration this week and could announce measures that could boost domestic demand and consumption, Torlizzi said.
Rising coronavirus infections boosted the dollar, making assets priced in the greenback, such as copper less attractive to global buyers.
The stronger dollar has dragged prices for copper down 13% since a record of $10,747.50 per tonne in May, after the U.S. Federal Reserve shocked the market with a hawkish tilt.
Meanwhile, aluminium prices were boosted by supply concerns in Russia and declining stocks , while lead hit its highest since July 2018.
Russia is preparing new export taxes for steel products, nickel, aluminium and copper.
Three-month aluminium on the London Metal Exchange rose 1.9% to $2,537 a tonne, while lead rose 3% to $2,299.
INVENTORIES: On-warrant copper stocks in LME-registered warehouses dipped 1,350 tonnes to 197,025 tonnes but are still nearly 160% higher this year.
SPREADS: LME copper remained in contango, indicating plentiful supply. The discount of LME cash copper to the three-month contract was at about $22.30 a tonne compared with a premium of $30 in April.
TIN DEFICIT: Shortages of tin are expected to climb in the coming years as demand rises for electronics and to drive the green revolution, while investment in mines has been lagging, the International Tin Association (ITA) said.
News source- Economic Times