SHANGHAI: Shanghai Copper opened the week higher on Monday, bolstered by expectations of an interest rate cut by the US Federal Reserve.
The most-active copper contract on the Shanghai Futures Exchange was up 0.52 per cent at 92,040 yuan (US$13,020.78) per metric ton as of 0215 GMT.
In contrast, the benchmark three-month copper on the London Metal Exchange ticked 0.23 per cent lower to US$11,593 a ton.
Markets are pricing in a quarter-point US interest rate cut on Wednesday. A Reuters poll of 108 analysts found only 19 voted for no change.
Signs of lower supply helped buoy copper prices in Asia. Deliverable copper in SHFE sheds declined 9.22 per cent by the end of last week, the exchange’s weekly stock report showed on Friday – the second consecutive week of declines.
Cancellations were also seen in available, or on warrant copper stocks in LME warehouses last week.
Meanwhile, copper inventories in the US Comex exchange continued to increase after hitting a record high in late November, totalling 436,853 short tons (396,306 metric tons) as of Friday.
Copper’s strength is rooted in a structural mismatch between supply and available stocks as a persistent Comex–LME premium has diverted the metal towards the US, tightening supply in the rest of the world, analysts at Chinese broker GF said in a note.
Supply concerns are also fuelled by mine disruptions and China‘s major smelters agreeing to slash output by 10 per cent.
Among other SHFE base metals, aluminium dropped 0.70 per cent, tin tumbled 1.17 per cent, zinc was unchanged, while lead and nickel were little changed.
Among LME metals, aluminium was down 0.33 per cent, nickel dropped 0.50 per cent, tin declined 0.67 per cent, zinc was little changed and lead posted gains of 0.22 per cent.
© New Straits Times Press (M) Bhd
