SINGAPORE, Aug 28: London copper edged up on Thursday on a weaker dollar as some investors switched to safe-haven currencies amid mounting geopolitical tensions over Syria, while Chinese demand also supported prices.
The dollar fell to a one-week low against a basket of currencies, underpinning metals. Commodities, priced in dollars, become cheaper for holders of other currencies as the greenback falls.
The United States and its allies were gearing up on Tuesday for a probable military strike against Syria that could happen within days as punishment for last week’s chemical weapons attacks blamed on President Bashar al-Assad’s government.
Three-month copper on the London Metal Exchange had inched up 0.27 percent to $7,335 a tonne by 0241 GMT. It fell 0.6 percent the session before.
The most-traded December copper contract on the Shanghai Futures Exchange was barely changed at 52,840 yuan ($8,600) a tonne after hitting four month highs of 53,620 yuan a tonne on Monday.
A brightening picture for global demand has fuelled a rebound in copper prices of more than 10 percent in the past two months, but most of the good news is now priced in, said Sydney-based analyst Matthew Fusarelli at AME Group.
‘The world is looking better, but for copper, demand is not looking better,’ he said.
‘In China, fabricators are running down their supply chains, there is more mine supply coming on line…We don’t see anything that is going to add to demand so it’s pretty hard to see a sustained uplift in prices,’ he added.
Copper prices are still down more than 7 percent for the year.
Premiums for copper in bond in China have moderated by $10 this week to around $185, according to China price provider Shmet, but they still remain not far from 4-year peaks of $210 reached in late June. (http://www.Shmet.Com/)
High premiums and tight credit conditions could be encouraging copper consumers to run down stocks instead of buying fresh material, Fusarelli said.
In news, the Hong Kong Stock Exchange named industry veteran Garry Jones as the CEO of the London Metal Exchange, banking on a former top executive at the NYSE Liffe to help drive its expansion into commodities and beyond.
(AGENCIES)
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