Copper firms on weaker dollar, heads for monthly gain

Copper prices held firm on Friday and remained on track for a monthly gain, supported by a weaker US dollar, tightening inventories and continued supply concerns.

 

Benchmark three-month copper on the London Metal Exchange (LME) was little changed at $13,804.50 per metric tonne, putting the contract on course for a 3.25% gain in July. The most-active copper contract on the Shanghai Futures Exchange (SHFE) rose 0.71% to 105,510 yuan ($15,636) per tonne, extending its monthly gain to 2.75%.

 

The US dollar weakened overnight, making dollar-denominated commodities more affordable for holders of other currencies. Copper prices have also been supported by declining inventories, supply constraints and resilient demand from China.

 

LME copper stocks fell 21.4% during July to 255,400 tonnes, with more than 60% of remaining inventories earmarked for delivery. Stock levels have been affected by increased shipments to the United States ahead of potential import tariffs on the metal.

 

In China, demand for refined copper remained firm as limited availability of copper scrap prompted manufacturers to increase purchases of refined metal. The Yangshan copper premium, a key indicator of physical demand, remained significantly higher than at the start of the month despite easing from its recent peak.

 

Among other base metals, aluminium was little changed, while nickel and tin posted modest gains. Lead edged lower, and zinc traded largely flat on the LME.