Base metals rise as dollar weakens ahead of U.S. inflation data

Base metals prices rose on Tuesday, supported by a weaker dollar ahead of U.S. inflation data, making greenback-priced metals cheaper to holders of other currencies, Reuters reported.
Three-month copper on the London Metal Exchange CMCU3 was up 0.4% at $7,990.50 a tonne, as of 0531 GMT, while the most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 advanced 1.1% to 62,970 yuan ($9,096.42) a tonne.
LME tin CMSN3 rose 1.5% to $21,780 a tonne, zinc CMZN3 climbed 1.3% to $3,238 a tonne and aluminium CMAL3 increased 0.9% to $2,304 a tonne.
The dollar nursed losses ahead of U.S. inflation data, which investors hope might show some signs of softening. Recent dollar gains have slowed on market expectations that peaking inflation will mean less aggressive interest rate hikes from the Federal Reserve.
The premium of LME cash copper over the three-month contract MCU0-3 ended at $124 a tonne on Monday, the highest since November 2021, indicating tightening supply of immediately available copper in the exchange warehouse system.
Meanwhile, the LME zinc cash-three month premium CMCU0-3 fell to $13.25 a tonne, its lowest since June 10, suggesting that nearby supply tightness has eased.
ShFE nickel SNIcv1 jumped 4.8% to 189,730 yuan a tonne, tin SSNcv1 advanced 2% to 182,240 yuan a tonne, zinc SZNcv1 increased 1.3% to 24,765 yuan a tonne and lead SPBcv1 was up 1.3% to 15,145 yuan a tonne.
Supply disruptions in Europe and China, two major producing hubs of aluminium and zinc, also lifted prices.
China’s southwestern province of Yunnan has ordered producers of electrolytic aluminium to cut power usage by about 10% from their normal consumption from Sept. 13 to Sept. 14, officials at two producers told Reuters.
The demand outlook for metals is still subdued as China continues to restrict activities to curb the spread of the coronavirus, coupled with weaker economic growth globally.
“I don’t really see much demand pickup,” said a trader.