Copper prices rose on Thursday to their highest in nearly six weeks, helped by easing demand worries after U.S. inflation data came in softer than expected.
Three-month copper on the London Metal Exchange CMCU3 rose 0.1% to $8,091 a tonne, as of 0443 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange SCFcv1 rose 1.5% to 62,250 yuan ($9,237.55) a tonne.
Both contracts hit their highest since July 1 earlier in the session.
U.S. consumer prices did not rise in July compared with economists’ expectation of a 0.2% gain, a report that could allow the Federal Reserve to dial down the size of its interest rate hike in September.
Rising interest rates could curb global economic growth and hurt demand for industrial metals which are used in a wide range of industries. Copper is often used as a gauge of global economic health.
“The market has been short as per our estimates in which macro fears of inflation were depressing commodities prices,” said Zenon Ho, an analyst at broker Marex.
“Yesterday, U.S. data was surprisingly good and there was a certain element of short-covering involved.”
However, U.S. policymakers pushed back on market expectation for rate cuts next year and assured they would continue to tighten monetary policy until price pressures are fully broken.
ShFE nickel SNIcv1 jumped 5.2% to 176,300 yuan a tonne, zinc SZNcv1 advanced 2.4% to 25,345 yuan a tonne and tin SSNcv1 increased 2.2% to 200,410 yuan a tonne.
Tight inventories across base metals also lent support to prices.
ShFE copper stockpiles CU-STX-SGH were at their lowest since Jan. 21, while LME inventories of the metal MCUSTX-TOTAL fell to their lowest since June 29 and were down 30% since May.
LME nickel stocks MNISTX-TOTAL have fallen 73% in a year to 56,244 tonnes, the lowest since October 2008.
LME aluminium CMAL3 rose 0.3% to $2,496 a tonne and ShFE aluminium SAFcv1 edged up 0.1% to 18,725 yuan a tonne.
