Copper rises on China stimulus hopes; US inflation data in focus

Aug 10, 202306:32 UTC

Copper prices rose on Thursday on hopes of further Chinese stimulus measures as investors assessed weak economic data, though sentiment was cautious ahead of U.S. inflation print that could guide movements in the dollar.

Three-month copper on the London Metal Exchange HG1! advanced 0.4% to $8,435 per metric ton by 0710 GMT.

The most-traded September copper contract on the Shanghai Futures Exchange HG1! increased 0.6% to 68,590 yuan ($9,512.52) per ton.

Data on Wednesday showed China's consumer sector fell into deflation and factory-gate prices extended declines in July, raising more pressure on Beijing to boost policy stimulus.

Still, gains in metals prices were limited as concerns over weak demand in top metals consumer China and the lack of details on stimulus measures created some uncertainty.

Traders and investors were also cautious ahead of crucial U.S. inflation data, due later in the day, which should guide the path for interest rates and are linked to the outlook of the dollar.

Copper price performance is tied to how the dollar will move and what the U.S. Federal Reserve would do about interest rates, said a metals trader.

LME aluminium ALI1! rose 0.6% to $2,208 per ton, nickel NICKEL1! edged up 0.3% at $20,615, zinc ZNC1! was up 0.2% at $2,485, lead LEAD1! increased 0.3% to $2,134 and tin FTIN1! fell 0.8% to $27,030.

SHFE aluminium ALI1! rose 0.4% to 18,505 yuan per ton, nickel NICKEL1! fell 0.9% to 163,950 yuan, zinc ZNC1! rose 1.2% to 20,950 yuan, lead LEAD1! climbed 0.4% to 15,985 yuan and tin FTIN1! dropped 1.1% to 222,830 yuan.

The tightness in LME tin has eased, with the cash contract trading at a $170-per-ton discount to the three-month contract (CMSN0-3), the biggest discount since March 15.

In zinc, the LME cash contract was at a $36.50 per ton premium to the three-month contract, the highest premium since Feb. 20 and indicating increasing tightness of nearby supplies.

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($1 = 7.2105 yuan)