The most-active July copper contract on the SHFE traded at 51,180 yuan ($8,029) per tonne as at 11.23am Shanghai time, up 160 yuan per tonne from Wednesday’s close. Around 120,000 lots of the contract have changed hands so far this morning.
Copper prices had weakened earlier this week to as low as 50,690 yuan per tonne on Tuesday amid concerns over rising stock levels. On Thursday, investors closed their short positions to take profit on the contract which saw open interest for the contract fall to 214,748 positions at as 10.56am Shanghai time, from 215,988 positions at Wednesday’s close.
The macroeconomic environment is stable, but the rise in domestic copper stock levels could apply downward pressure on copper prices, Guotai Junan Futures said in a note on Thursday.
Copper inventories in SHFE warehouses rose for a second consecutive week in the week ended May 11, reaching a total of 279,525 tonnes. Stocks in London Metal Exchange warehouses had risen consecutively over Monday and Tuesday, but saw a slight 525-tonne net decline to 290,825 tonnes on Wednesday.
In news, Polish copper producer KGHM was reported to have said on Tuesday that it has temporarily closed its Sierra Gorda copper mine in Chile following a fatal accident.
“With copper production of 101,700 tonnes last year and accounting for only 1.85% of Chile’s total production, the impact of the shutdown should be limited,” China’s Ruida Futures said late on Wednesday.
Meanwhile, the dollar index has eased after hitting as high as 93.64 on Wednesday, the highest since December 19, 2017. It was at 93.17 as at 11.22am Shanghai time, down 0.13% from its previous closing price.
US industrial production data provided further evidence that activity is expanding at a stronger pace in the second quarter, ANZ Research said on Thursday.
US data suggests that the US Federal Reserve is “locked and loaded” for a June rate rise, the bank said.
“However, we think it will pause after that until December, but the three or four hike debate for 2018 will continue to run,” it added.
Base metals prices
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