Mumbai, 15 Feb (Commoditiescontrol):Copper prices inched higher on Thursday, supported by a mild retreat in the U.S. dollar and diminishing stock levels. However, the market's momentum was restrained due to the ongoing Lunar New Year celebrations in China, the leading consumer of metals.
On the London Metal Exchange (LME), three-month copper contracts saw a modest increase of 0.3%, reaching $8,220.50 per metric ton as of 11 AM GMT.
The dollar index, which tracks the performance of the U.S. currency against a basket of other major currencies, dipped by 0.1%. This decline followed its climb to a three-month zenith on Tuesday, triggered by market adjustments in anticipation of a delayed Federal Reserve rate hike, in response to unexpected spikes in U.S. inflation. A softer dollar tends to make dollar-denominated commodities, like copper, more affordable for purchasers using other currencies.
Copper's upward trajectory was further bolstered by LME data revealing a drop in copper inventories within LME-registered warehouses to 133,825 tons as of February 13, marking the lowest level since September.
Analysts at ANZ highlighted potential market tightening due to disruptions in mine supply. They also noted the positive impact of China's stable growth trajectory and increased infrastructure investments on the sector. The emphasis on electric vehicles and power grid expansions is expected to rejuvenate demand for metals in downstream industries. Despite these factors, copper's price has declined by over 4% this month, weighed down by concerns about China's demand, especially in the real estate sector.
Asian stock markets, however, exhibited a more upbeat trend on Thursday. Japan's Nikkei index achieved a new 34-year high, even as the country's economy entered a recession, contracting for the second consecutive quarter due to weak domestic demand.
In other metals trading on the LME, aluminium edged up by 0.1% to $2,238.00 per ton, nickel increased by 0.2% to $16,375, zinc rose by 0.5% to $2,324, and lead advanced by 1.1% to $2,038.50. Conversely, tin saw a slight decrease of 0.2%, settling at $27,420.
(By Commoditiescontrol Bureau; +91-9820130172)