HomeNewsCopper propped up by weaker dollar, nervous over Mideast - Markets

Copper propped up by weaker dollar, nervous over Mideast – Markets

LONDON: Copper prices edged higher on Monday as the dollar weakened and China’s central bank injected liquidity, but worries about the Middle East crisis and global growth weighed on the market.

Three-month copper on the London Metal Exchange was up 0.1% at $7,957 per metric ton by 1425 GMT, having shed 10% since the start of August.

The dollar index drifted lower but remained near a one-week high against a backdrop of conflict in the Middle East supporting demand for the safe-haven currency.

A weaker dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies.

Copper extends losses on firm dollar

“The positioning in copper is still short, even though it’s much reduced, but it still indicates that traders are looking for lower prices,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“There’s worry that if there’s a widening Middle East conflict, you could see crude oil prices blow out and that would increase worries about a recession and would not be good for metals in general.”

Helping to lift copper and other metals was a move by the central bank of top metals consumer China to ramp up liquidity support to the banking system.

“Metals remain steady thanks to China and specifically the PBOC making the biggest medium term liquidity injection since 2020,” Al Munro at broker Marex said in a note.

China’s economy is expected to have slowed in the third quarter, data is due to show on Wednesday, according to a Reuters poll.

Also supporting copper has been stronger than expected physical demand in top metals consumer China as September copper imports by China hit an intra-year high, although still lower than last year’s volume.

Copper demand has been supported by strong government-led infrastructure investment in China, particularly in renewable power, offsetting ongoing weakness in the property sector, analysts at Macquarie said in a report.

Among other metals, LME aluminium slipped 0.7% to $2,184.50 per ton while zinc climbed 0.4% to $2,454.50, lead added 0.6% to $2,055, nickel gained 0.9% to $18,710 and tin rose 0.5% to $25,215.



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