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Copper set for best week in 6 on weaker dollar, China demand optimism

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LONDON — Prices of copper and other industrial metals extended gains on Friday, boosted by a weaker dollar, optimism about top metals consumer China and persistent smelter shutdowns curbing supply.

Three-month copper on the London Metal Exchange had gained 2.1% to $7,971 a tonne by 0945 GMT after rising by 2.5% on Thursday.

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The contract has climbed 4.5% so far this week, the most since the week ended July 29.

Data on Friday showed China’s consumer prices rose at a slower-than-expected pace while producer inflation hit an 18-month low, leaving room for further central bank policy easing.

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“Looks like we’re off to the races again. We had some weaker data coming out of China and there’s also various shutdowns,” said Robert Montefusco at broker Sucden Financial.

High energy prices have forced cuts in the production of energy intensive aluminum and zinc.

LME aluminum rose 1.4% to $2,299 a tonne.

“We’re watching what’s going on with the energy prices, but if we’re not seeing the demand and we keep seeing stocks coming in, then I don’t know how much further prices can go up,” Montefusco added.

Aluminum inventories on the LME had been steadily falling this year, but strong inflows this week have pushed up the total by 21%.

Helping boost prices was a pullback in the dollar index , making commodities priced in the U.S. currency cheaper for buyers using other currencies.

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Copper prices have been supported by tight supply of immediately available metal. The premium of LME cash copper over the three-month contract ended at $108.50 a tonne on Thursday, its highest since November 2021.

Copper demand in China has improved since last month, CRU analyst He Tianyu said, adding that consumption of the metal is expected to be stronger in the fourth quarter.

The most-traded October copper contract on the Shanghai Futures Exchange advanced 3.5% to 63,070 yuan ($9,106.00) a tonne.

ShFE trading volume was robust as market participants rushed in orders ahead of the exchange closure for a Chinese public holiday on Monday, a trader said.

In other metals, LME zinc advanced 2.4% to $3,201.50 a tonne, nickel jumped 4.2% to $22,665, lead gained 1.3% to $1,906 and tin added 0.7% to $21,500.

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($1 = 6.9262 yuan) (Reporting by Eric Onstad Additional reporting by Mai Nguyen in Hanoi; Editing by Vinay Dwivedi)

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