METALS-Copper falls as rising inventories spur demand concerns

  • 3/18/2021
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(Updates prices) HANOI, March 18 (Reuters) - Copper prices fell on Thursday as rising global inventories and falling premiums in top consumer China stoked demand worries and offset support from a weaker dollar amid dovish U.S. central bank comments. Three-month copper on the London Metal Exchange fell 0.5% to $9,019.50 a tonne by 0801 GMT, having risen as much as 0.9% earlier in the session. “A weak physical market in China and concerns about rising U.S. Treasury yields offset a soft U.S. dollar,” said commodities broker Anna Stablum of Marex Spectron in a note. “Quiet Chinese metals markets with falling copper premiums weighed on sentiment,” she added. Yangshan copper premium SMM-CUYP-CN was last at $67 a tonne, hovering around its lowest since Jan. 13, indicating weakening demand for imported copper into top consumer China. Meanwhile, stockpiles are rising in exchange warehouses, with LME copper inventories MCUSTX-TOTAL hitting their highest since Dec. 30 at 107,275 tonnes, and ShFE stockpiles CU-STX-SGH were last at their six-month high of 171,794 tonnes. The U.S. dollar was on the defensive on Thursday after the Federal Reserve signalled it was in no hurry to raise interest rates through all of 2023 even as it saw a swift recovery in the world’s largest economy. A weaker dollar made greenback-priced metals more attractive to holders of other currencies. The most-traded May copper contract on the Shanghai Futures Exchange closed up 0.5% at 66,920 yuan ($10,291.27) a tonne. FUNDAMENTALS * LME aluminium dipped 0.5% to $2,216.50 a tonne, nickel fell 0.1% to $16,055 a tonne and zinc declined 0.7% to $2,806 a tonne. * ShFE aluminium fell 0.8% at 17,475 yuan a tonne and ShFE zinc dropped 0.9% to 21,440 yuan a tonne. * LME cash aluminium was at its biggest discount since October 2020 of $33.50 a tonne discount to the three-month contract CMAL0-3 as exchange inventories jumped. * For the top stories in metals and other news, click or $1 = 6.5026 yuan Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips, Ramakrishnan M and Uttaresh.V

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