Mumbai, 04 Jun (Commoditiescontrol): Nonferrous metals prices experienced an upward trend on Tuesday, supported by a weaker dollar and increasing prospects of earlier U.S. interest rate cuts amid disappointing economic data.
By 0955 IST, three-month copper on the London Metal Exchange (LME) rose 0.5% to $10,190.50 per metric ton. Concurrently, the most-traded July copper contract on the Shanghai Futures Exchange (SHFE) advanced 0.6% to 82,180 yuan ($11,341.90) per ton.
The dollar's decline was spurred by a slowdown in U.S. manufacturing activity and construction spending, which bolstered the case for earlier Federal Reserve interest rate cuts. Such cuts typically enhance economic activities and boost the physical consumption of metals by making dollar-priced commodities more affordable for holders of other currencies.
"Copper remains key in driving the base metals narrative, and markets now look comfortable above the $10,000 a ton level, which serves as a solid basis for future price moves," Sucden Financial analysts noted in a report.
Last month, copper prices hit record highs due to expectations of increased usage in green energy sectors and concerns over potential shortages. However, the price rally has dampened physical demand, as evidenced by the discount on imported copper in China since mid-May.
"Despite maintaining a moderately bullish outlook for the longer term, we believe a slight correction below this support level could realign the price closer to its fair value. We expect copper will test the $10,000-a-ton level this week," Sucden analysts added.
On the LME, aluminium increased by 0.6% to $2,677.50 per ton, nickel edged up 0.1% to $19,435, zinc climbed 0.7% to $2,964, lead was up 0.3% to $2,294, and tin advanced 1.1% to $32,690.
In the SHFE market, aluminium rose 0.5% to 21,385 yuan per ton, lead climbed 1.1% to 18,990 yuan, while zinc edged down 0.3% to 24,395 yuan. Nickel dropped 2.1% to 146,340 yuan, and tin shed 1.4% to 267,860 yuan.
Copper's net long positioning on the COMEX reached its highest level since February 2021 on May 21 but saw a slight reduction by May 28, according to the latest exchange data.
(By Commoditiescontrol Bureau; +91-9820130172)
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