METALS-Weak dollar, China demand hopes lift copper to over 2-week high

Credit: REUTERS/James Akena

By Brijesh Patel

May 23 (Reuters) - Copper prices rose to a more than two-week high on Monday, helped by a weaker U.S. dollar and as support measures and plans to end COVID-19 lockdowns in top metals consumer China lifted hopes for a recovery in demand.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.8% at $9,497.50 a tonne, as of 0711 GMT, after hitting its highest since May 5 at $9,532 in early Asian trade.

The most-active June copper contract on the Shanghai Futures Exchange SCFcv1 ended daytime trading up 0.4% at 72,050 yuan ($10,813.77) a tonne, after touching its highest since May 6.

"Larger than expected China rate-cut is targeted at stimulating the property sector, which will provide a short-term bounce," said Stephen Innes, managing partner at SPI Asset Management.

"Last week, everyone turned worried about stagflation and commodities are not immune to that cyclical slowdown. So, we could be seeing short covering or some re-entering on China demand."

Shanghai, in its seventh week of lockdown, has been slowly allowing more people to leave their homes in recent days and plans to lift its city-wide lockdown and return to more normal life from June 1.

China cut its benchmark reference rate for mortgages by an unexpectedly wide margin on Friday, as Beijing seeks to revive the ailing housing sector to prop up the economy.

DOLLAR: The dollar USD= fell to 0.2% to a near two-week low hit last week, making greenback-denominated metals less expensive for buyers using other currencies. FRX/

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IRONORE: India raised export duties for iron ore and steel intermediates, sending benchmark iron ore futures in China up about 7% on Monday.

COPPER: Operations have been suspended at Khoemacau Zone 5 copper and silver mine in Botswana after an underground accident killed two people on Friday.

Inventories: Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.7% from a week ago, the exchange said on Friday.

OTHER METALS: LME aluminium CMAL3 gained 1.5% to $2,989.50 a tonne, zinc CMZN3 rose 0.8% to $3,737, nickel CMNI3 slipped 1.7% to $27,505, lead CMPB3 climbed 1% to $2,180.50, while tin CMSN3 eased 0.1% to $34,620.

Shanghai aluminium SAFcv1 added 0.7%, zinc SZNcv1 fell 1.1%, nickel SNIcv1 slipped 1%, lead SPBcv1 gained 1%, while tin SSNcv1 eased 0.5%.

($1 = 6.6628 Chinese yuan renminbi)

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V)

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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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