Overview of LME base metals on August 2021, 09
London, September 17 news: On Friday, the London Metal Exchange (LME) copper futures fell, and the dollar was firm, putting pressure on copper prices.
As of 1600 Greenwich, the London benchmark three-month copper fell 0.5% to $9321 per ton.
On the weekly chart, 3-month copper fell by $364, or 3.76%. LME copper rose by US$246 or 2.61% in the previous week.
On May 10th, the London copper futures had reached an all-time high of US$10,747.5, which was nearly 40% higher than the price at the end of 2020. Since then, copper prices have fluctuated downwards and have fallen by 13.3% from their historical highs, mainly due to high copper prices affecting the demand of downstream companies and concerns about China’s strengthening of the regulation of bulk commodities. The Fed may raise interest rates early, which will also have a negative impact on copper prices.
On Friday, the U.S. dollar index hit a new high in several weeks, up 0.6% from a week ago, marking the biggest weekly percentage gain since mid-August. A stronger U.S. dollar means that copper quoted in the U.S. dollar is more expensive for buyers holding other currencies, thereby curbing demand and prices.
On Thursday, the LME nickel futures fell 0.2% to US$19,360 per ton, mainly due to profit selling. The price of this metal used in electric vehicle batteries hit US$20,705 per ton last week, the highest level since May 2014. Traders pointed out that nickel inventories are low, demand is stronger than expected, and supply has not kept up. Indonesia’s idea of imposing an export tax will only further boost nickel prices. The Minister of Investment of Indonesia stated that Indonesia is exploring the possibility of imposing an export tax on nickel products with a nickel content of less than 70% in order to promote the expansion of the domestic processing industry.
Nickel stocks in LME registered warehouses are 171,714 tons, which has fallen by 35% since April. Among them, the warehouse receipts used for delivery accounted for 35%. A company holds a large number of registered warehouse receipts for nickel, which also exacerbated the concern of tight supply of LME nickel stocks.
On Friday, the LME’s three-month aluminum rose 0.2% to US$2885.5. The intraday was close to a 13-year high, as the market expected the number one producer to accelerate production cuts to control emissions, which could lead to severe supply shortages. Concerns about production interruptions in Guinea have also boosted aluminum prices, which has large bauxite reserves.
The closing of other metals included zinc prices falling 0.1% to US$3,078, lead prices falling 1.2% to US$2,180 per ton, and tin prices rising 0.3% to US$34,140 per ton.