Metals News
Weaker Dollar Boosts Copper, Lead Hits New 16-mth Top
smm insight

MANILA, Sept. 8 -- A softer dollar and stronger equities buoyed copper on Tuesday, though gains appeared fragile on persistent worries about the pace of the global economic recovery.

    Asian shares shrugged off a lack of direction from holidaying U.S. markets and powered to a one-year high, including laggards such as Japan's Nikkei, which has yet to recover levels it touched a year ago.

    The dollar's weakness and uncertainty about the global economy also pushed gold above $1,000 an ounce for the first time in six months.

    Battery material lead climbed nearly 3 percent to a high of $2,415 a tonne, its best level since early May 2008 on continuing supply worries following smelter shutdowns in China due to pollution concerns.

    Analysts are looking to China's trade data due out on Friday which is expected to show that imports of the world's top copper consumer may have dropped for the second straight month in August due to increased inventories from record imports in the first half.

    "That is probably the next key signpost for the base metals market," said commodity strategist David Moore at Commonwealth Bank of Australia.

    "But I think base metals prices might correct lower in the next three to six months given the build in stocks recently and also the softer level of China's imports."

    Three-month copper on the London Metal Exchange rose $71 to $6,395 a tonne by 0704 GMT, extending Monday's $44 gain.

    Shanghai's benchmark third-month copper rose 340 yuan to 49,880 yuan ($7,303) a tonne while the most-active December contract added 320 yuan to 49,840 yuan.

    The market is turning more active with the U.S. reopening after the long Labour Day weekend although trading may be limited to narrow ranges after last week's mixed U.S. employment report suggested a slow and protracted economic recovery.

    "Overall, we continue to maintain that commodity complexes should remain steady over the short term, with occasional corrections likely used as buying opportunities," MF Global commodity analyst Edward Meir said in a note.

    "Investor sentiment is still heavily biased towards the 'recovery trade', and the generally decent macro numbers that are coming out should continue to support this view."

    (Source: Reuters)

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