Commodities

METALS-Copper rises on weakening dollar as risk appetite improves

Credit: REUTERS/© Darren Whiteside / Reuters

Copper prices advanced on Thursday on a weaker dollar as investors' sentiment improved amid strong earnings in the U.S. market, while a lower-than-expected metals sales plan by China also supported the red metal.

By Mai Nguyen

July 22 (Reuters) - Copper prices advanced on Thursday on a weaker dollar as investors' sentiment improved amid strong earnings in the U.S. market, while a lower-than-expected metals sales plan by China also supported the red metal.

Three-month copper on the London Metal Exchange CMCU3 was up 0.8% at $9,418 a tonne, as of 0646 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange SCFcv1 increased 1.1% to 68,930 yuan ($10,663.02) a tonne.

The safe-harbour dollar was on the back foot, after pulling back from multi-month highs as strong earnings lifted Wall Street stocks, making greenback-priced metals cheaper to holders of other currencies.

China will sell another 30,000 tonnes of copper, 90,000 tonnes of aluminium, and 50,000 tonnes of zinc from its state reserves on July 29, less than the market has anticipated.

The auction marked the second sale by China this month as the government aims to rein in skyrocketing commodity prices.

Analysts at ANZ said in a note that the additional metal from China's state reserve sale would unlikely dent overall demand.

FUNDAMENTALS

* ShFE lead SPBcv1 climbed 1.1% to 15,945 yuan a tonne and LME lead CMPB3 advanced 0.3% to $2,344.50 a tonne, as German lead producer Berzelius Stolberg declared force majeure on metal shipments from its Stolberg smelter in Germany due to floods.

* The premium of LME cash lead over the three-month contract CMPB0-3 expanded to $17.50 a tonne, its highest since July 2, indicating tightening nearby supplies.

* The global world refined copper market showed a deficit of 75,000 tonnes in April, compared with 13,000 tonnes deficit in March, the International Copper Study Group said in its latest monthly bulletin.

* For the top stories in metals and other news, click

TOP/MTL or MET/L

($1 = 6.4644 yuan)

(Reporting by Mai Nguyen in Hanoi, Editing by Sherry Jacob-Phillips and Elaine Hardcastle)

((mai.nguyen@thomsonreuters.com; +842438259623; Reuters Messaging: mai.nguyen.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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