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Copper on warrant stocks are at the lowest since late 2021
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Zinc prices touch lowest level in five months
(Updates prices)
By Polina Devitt
LONDON, April 5 (Reuters) - Copper prices in London rose
on Wednesday due to support from lower inventories and despite
continuing concerns about global economic growth and a stronger
dollar.
Three-month copper on the London Metal Exchange (LME) rose 0.5% to $8,790 a tonne by 1606 GMT, after earlier
hitting $8,665, its lowest in two weeks.
"The latest manufacturing data in the U.S. and China is
fuelling concerns of weaker economic growth. Impact of higher
oil prices is also weighing on the market sentiment, though
fundamentals have not changed much as inventories are still
drawing down," said Soni Kumari, commodity strategist at ANZ
Research.
U.S. manufacturing activity slumped to the lowest level in
nearly three-years in March, and China's manufacturing sector
lost momentum in the same month.
"We see metals remaining sensitive to disappointing macro
developments in the short-term, but increasing supply
disruptions and lower inventories should continue to protect the
downside," Kumari added.
Global copper smelting activity fell in March, and Chile's
total copper production dropped 3.4% in February.
Copper stocks in LME registered warehouses, which are at 65,250 tonnes, have dropped almost 15% over the past two weeks. . Cancelled warrants - metal earmarked for delivery -- at around 47% of the total suggest more metal is due to leave the LME system, leaving on warrant stocks at 34,350 tonnes, the lowest since late 2021. Making metals costlier for buyers with non-dollar currencies, the dollar index recovered from two-month lows hit in the previous session. LME zinc prices were 1.0% lower at $2,802 a tonne after hitting $2,775, their lowest level in five months, while aluminium fell 1.2% to $2,343. According to Goldman Sachs, the aluminium market has shifted into a deficit state, and prices for the metal could rise over the year. Tin fell by 3.0% to $24,250, nickel was down by 1.9% to $22,675 and lead lost 0.3% to $2,111. (Reporting by Polina Devitt; additional reporting by Neha Arora; editing by Alexandra Hudson and Kirsten Donovan)
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