2023-12-19 17:10:36
Copper prices rose on Tuesday as concerns over supply, fueled by mine closures, a falling dollar and dwindling inventories in London Metal Exchange (LME)-approved warehouses, triggered buying.
Benchmark copper on the LME was up 1.3% at $8,596 per metric ton at 1701 GMT. Prices for the metal used in the energy and construction industries hit their highest level in 4 1/2 months at $8,640 per tonne. Traders said volumes were low.
Analysts are reducing surplus estimates for next year or forecasting deficits, partly due to uncertainty over supplies from First Quantum’s Cobre mine in Panama. Copper accounted for 1% of global ore supply last year.
“There are some micro issues in copper,” said Alastair Munro, a strategist at Marex, referring to the Cobre Panama mine, Anglo American’s reduced production forecast and inventory data.
“Most of the flows into the metals sector come from CTAs,” he added, referring to funds that use trends to generate buy and sell signals from digital models.
Anglo American has cut its copper production forecasts for the next two years by 20% and 18% respectively.
Stocks of copper in LME warehouses have risen 8% to 168,650 metric tonnes since December 6, but canceled warrants – metal earmarked for delivery – at 21% suggest more copper is likely to leave the LME’s system. LME.
Furthermore, LME aluminum stocks increased further. At 511,450 tonnes, they rose 15% over the past two days and are weighing on prices of the metal used in the transportation, packaging and construction industries.
Aluminum was down 0.8% at $2,265 a tonne.
Traders expect new aluminum deliveries to the LME system following the UK government imposed sanctions on imports of the Russian primary metal.
Overall, industrial metals have been supported by the decline in the U.S. currency, making dollar commodities cheaper for holders of other currencies, which might boost demand.
In other metals, zinc gained 1.6% to $2,580 a tonne, lead firmed 0.7% to $2,072, tin gained 1.5% to $25,190 and nickel rose 1.3% to $16,715.
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