Copper eases on higher inventories, steady U.S. dollar

PHOTO

SINGAPORE - Copper prices fell on Monday on inventory pile-up and a steady dollar after strong U.S. jobs data tuned down hopes of an aggressive rate cut by the Federal Reserve.

U.S. job growth rebounded strongly in June, helping the U.S. dollar hover around its highest level since June 19. A stronger dollar makes greenback-denominated metals more expensive to import using other currencies.

Copper inventories in warehouses approved by the London Metal Exchange (LME) touched a near 13-month high at 302,975 tonnes on Thursday, data released last week showed.

Three-month copper on the London Metal Exchange was down 0.1% at $5,898 a tonne, as of 0359 GMT, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) was unchanged at 46,420 yuan ($6,736.32) a tonne.

FUNDAMENTALS

ZINC SPREAD: The differences between cash zinc and three-month contract flipped to a discount of $3 a tonne on Friday after holding in premiums zone in nearly five months, suggesting greater availability of nearby supply.

ZINC PRICES: ShFE zinc hit a six-month low of 19,240 yuan a tonne, tracking falls on the LME on concerns of rising supplies and weak demand. LME zinc was flat after hitting its lowest since Jan. 3 on Friday.

"An increase in refined zinc production led to the drop in premium," said a China-based analyst.

ZINC CHARGES: Treatment and refining charges in China, the top producer of the metal, have been held at an all-time high of $240 a tonne since May, suggesting China's smelting capacity has not matched the processing need for concentrate.

Meanwhile, Chinese zinc smelters are scheduled to enter their seasonal maintenance season in July and August, so refined zinc supply is expected to rise only at a marginal level in the coming months, said another analyst based in China.

TSINGSHAN/GEM: Tsingshan and other firms investing in an electric vehicle battery chemical plant in Indonesia will have to pay significantly more than a $700 million price tag estimated last year, sources familiar with the matter said.

INDONESIA TIN: Indonesia's refined tin exports surged 36% annually to 7,620.9 tonnes in June, trade ministry data showed on Friday.

PRICES: ShFE tin rose 2.2%, while nickel jumped 1.7% and aluminium dipped 0.4%. LME aluminium was almost unchanged, nickel advanced 0.2% and tin rose 0.7%.

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PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel