The copper and other base metals resumed their rally on Wednesday amid the falling dollar and fears that the global energy crisis could affect already weakened inventories, Reuters reported.
At 16.10 GMT, three-month copper on the London Metal Exchange (LME) it rose 0.5% to $ 10,193 a tonne after earlier falling to $ 9,908.50 after China’s state planner said it was looking for ways to cool record coal prices.
Energy shortages in China and rising electricity prices in Europe raise concerns about insufficient supplies of base metals, some of which have inventory levels at multi-year lows.
“There are very tight copper stocks at the moment and that is still a concern, but prices (are) decelerating mainly on technical signals showing that copper was overbought,” said Xiao Fu, Bank of Bank’s chief of commodity strategy. China International.
Low inventories of the red metal in the LME system pushed prices to a high of $ 10,452.50 on Monday, close to a May record of $ 10,747.50. The spot copper premium over the three-month contract eased to about $ 157 per tonne from an all-time high of $ 1,103.50 on Monday, pointing to a lessening of concerns about the metal for early delivery.
Copper on-warrant stocks in deposits registered with the LME increased by 2,650 tonnes to 17,875 tonnes, still near lows since 1998. Inventories on the Shanghai Futures Exchange (ShFE) total 41,668 tonnes, their lowest level since 2009 .
The LME, the world’s oldest and largest industrial metals market, intervened Tuesday night, declaring that it would amend lending rules and implement a backwardation limit and deferral mechanism for copper trading with immediate effect. .
It should be noted that, in the morning, the pound of the red metal closed operations in the spot market with a drop of 4.61%, its biggest daily fall since last March 4 (-5.17%). However, the average price of the pound in 2021 was US $ 4.183, much more than the US $ 2.80 for all of 2020.
China’s refined copper production increases 2.4% year-on-year in September
On the other hand, Reuters also reported that China’s refined copper production rose 2.4% year-on-year in September to 885,000 tonnes, the highest monthly volume since April, according to a report released Wednesday by the National Statistics Office.
Production increased 1.3% compared to August, indicating a low impact on copper smelters from electricity supply restrictions due to the energy crisis in China.
Increased treatment and refining charges and high sulfuric acid derivative prices are also incentivizing smelters to increase their operating pace, while the country’s iron ore production jumped 9.6% year-on-year to 84.7 million tons in September, the statistics office said.
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