The majority of base metals advance on weak dollar data from China.
Recasts, China industrial profits added, and price adjustments as of 03:57 GMT. December 27th, Beijing (Reuters): The market was also bolstered by a sluggish U.S. dollar and data indicating that manufacturing activity in leading consumer China improved last month, which led to an increase in the prices of the majority of base metals on Wednesday.
The majority of base metals advance on weak dollar data from China. As of 03:57 GMT, three-month copper on the London Metal Exchange CMCU3 increased 0.5% to $8,615 per metric tonne upon the resumption of trading following the Christmas holiday.
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In February, SCFcv1, the most actively traded copper contract on the Shanghai Futures Exchange, increased 0.1% to 69,240 yuan ($9,685.54 per tonne).
As manufacturing improved, China’s industrial profits increased by double digits in November, bolstering investor confidence in copper due to energy transition-driven demand and a constricted supply outlook in the wake of recent mine closures.
Analysts from Guotai Junan Futures noted that lackluster spot demand could impede near-term price increases.
On Tuesday, SMM-CU-PND, spot demand in China was subdued following a recent surge in replenishment, which resulted in the reversal of premiums to discounts of 110 yuan per tonne.
Although the dollar index increased, it remained near its lowest level in five months. The dollar was on track for its worst performance since 2020, as mounting expectations of Federal Reserve rate cuts diminished the currency’s appeal.
When the dollar weakens, the metal priced in greenbacks becomes more affordable.
In addition to supply-side concerns, metals prices were affected by bauxite shipments from Guinea and the aftermath of a fatal accident.
Zinc CMZN3 increased 0.2% to $2,606.50 per tonne, lead CMPB3 increased 0.6% to $2,075.50 per tonne, nickel CMNI3 added 0.8% to $16,640 per tonne, and tin CMSN3 increased 2.3% to $25,435.
SHFE aluminum SAFcv1 experienced a 0.6% increase, reaching 19,300 yuan per tonne; tin SSNcv1 climbed 2.3%, reaching 213,000 yuan; lead SPBcv1 marginally increased 0.4%, reaching 15,790 yuan; zinc SZNcv1, which fell 0.2%, and nickel SNIcv1, which declined 1%, both to 129,190 yuan.
