Make Kitco Your Homepage

Copper holds near $10,000 a tonne as traders eye new rally

Kitco News

(Updates prices)

LONDON, Jan 13 (Reuters) - Copper prices fell back on Thursday but remained near three-month highs, a day after rising sharply on a weakening dollar and concerns of a supply shortage. Benchmark copper on the London Metal Exchange (LME) was down 1.3% at $9,932 a tonne at 1720 GMT after rising 3.5% in the previous session.

Used in power and construction, copper rose 25% in 2021 and 26% in 2020. Many analysts expect the transition from fossil fuels to electrification to boost demand.

"A new wave of buying has started in base metals, especially those directly connected to the green transition," said Gianclaudio Torlizzi at consultants T-Commodity.

"We already had signs of that in less liquid markets like cobalt and lithium, which have spiked higher. It was only a matter of time before copper and nickel would chase them." Torlizzi said low inventories, Chinese economic stimulus and tight supply could push copper above last year's record high of $10,747.50 a tonne and nickel to $25,000 a tonne, its highest since 2011.

DOLLAR: The U.S. currency has weakened sharply, including against the yuan, making dollar-priced metals cheaper for Chinese and other non-U.S. buyers.

CHINA: The central bank of top metals consumer China is set to unveil more steps to support economic growth, which is expected to fall to 5.2% this year, a Reuters poll found.

INVENTORIES: Copper stocks in warehouses monitored by the Shanghai Futures Exchange (ShFE), at 29,182 tonnes, are near their lowest since 2009. Inventories in LME-registered warehouses, at 83,800 tonnes, are down from more than 250,000 tonnes in August.

NICKEL: Benchmark LME nickel was up 0.3% at $22,130 a tonne after reaching $22,745, the highest since 2011, on Wednesday. Nickel is used in stainless steel and in batteries to power electric vehicles. Inventories in ShFE warehouses, at 4,859 tonnes, are near record lows, while LME stocks are below 100,000 tonnes from more than 260,000 tonnes in April.

ALUMINIUM FACTBOX: Which of Europe's aluminium smelters have cut output due to high power prices.

OTHER METALS: LME aluminium was down 0.7% at $2,961 a tonne, zinc was up 0.1% at $3,557, lead rose 0.4% to $2,355.50 and tin was 1.5% lower at $40,780.

(Reporting by Peter Hobson Additional reporting by Eileen Soreng in Bengaluru; Editing by Susan Fenton, David Evans and Richard Chang)

LME price overview COMEX copper futures All metals news All commodities news Foreign exchange rates SPEED GUIDES ))

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.