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Copper prices supported by slowing dollar rally

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Copper prices rose on Monday, as a rally in the dollar ran out of gas and made the greenback-priced metal cheaper for holders of other currencies amid gloomy demand outlook.

Three-month copper on the London Metal Exchange rose 0.3% to $7,784 a tonne by 0551 GMT and the most-traded October copper contract on the Shanghai Futures Exchange climbed 0.9% to 62,580 yuan ($8,925.85) a tonne.

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The dollar index was at 109.84 after hitting a high of 110.79 on Sept. 7 for the first time since mid-2002, with market participants awaiting key central bank meetings this week.

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Prices of copper, often used as a gauge of global economic health, have dropped 28% from record highs hit in March, as tighter monetary policies to control rising inflation threaten to hurt growth and metals demand.

“Weakening investor sentiment and falling demand in light of slower global growth put downward pressures on prices,” Fitch Solutions said in a note, revising down its copper price forecast for 2022 to $8,800 a tonne from $9,470 a tonne.

“Nevertheless, persistent supply issues in Latin America will prevent prices falling much further, and we expect copper to remain elevated by historical standards, averaging around $7,500 a tonne over Q4 2022.”

ShFE nickel increased 3.3% to 191,420 yuan a tonne, tin rose 1.2% to 178,190 yuan a tonne and aluminum fell 0.9% to 18,755 yuan a tonne.

China’s aluminum imports in August dropped 19% from a year earlier to 200,440 tonnes, reflecting weaker import appetite amid record-high domestic production and tight overseas supply.

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(Reporting by Mai Nguyen in Hanoi; Editing by Devika Syamnath and Subhranshu Sahu)

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