Copper prices buoyed by weaker dollar, low inventories

Dec 21 (Reuters) – Copper prices rose on Tuesday, helped by a weaker dollar and concerns over tight supply, while demand for the industrial metal was forecast to get a boost from China’s easy monetary policy.

Three-month copper on the London Metal Exchange rose 0.6% to $9,505 a tonne, as of 0630 GMT. The most-traded January copper contract on the Shanghai Futures Exchange gained 0.5% to 69,260 yuan ($10,869.94) a tonne.

“Fundamentals remain supportive with low inventory and backwardation in place… Demand, on the other hand, could receive support from scrap tightness and policy easing in China,” a Singapore-based copper analyst said. read more

Copper, widely used in infrastructure projects, is often seen as a gauge of global economic health, with China being its top consumer.

On-warrant LME-registered stocks were at 80,000 tonnes, down 66% from the August high of 238,725 tonnes. Inventories in Shanghai Futures Exchange warehouses were at 34,580 tonnes last week, their lowest since June 2009.

Supply concerns were recently exacerbated by the suspension of production at MMG Ltd’s (1208.HK) Las Bambas copper mine in Peru. read more

“Investors are keenly watching all developments on both supply and demand sides, things are looking supportive amid little hope of inventories getting replenished anytime soon,” said ANZ analyst Soni Kumari.

The dollar was slightly lower, weighed by improving market appetite for risk assets and currencies, making the greenback-denominated commodity less expensive for those holding other currencies.

* LME aluminium rose 0.5% to $2,685 a tonne, nickel gained 1.2% to $19,600 a tonne, lead edged 0.3% higher to $2,300 a tonne and tin was up 0.5% at $38,400 a tonne.

* ShFE aluminium fell 0.7% to 19,565 yuan a tonne, nickel eased 0.2% to 144,630 yuan a tonne, zinc slipped 1.3% to 23,505 yuan a tonne, lead edged up 0.5% to 15,565 yuan a tonne and tin rose 1% to 285,650 yuan a tonne.

* Chile’s mining sector is bracing for tighter environmental rules ahead after President-elect Gabriel Boric pledged to oppose a controversial $2.5 billion iron-copper mine that was approved in August after years of legal wrangling. read more

* “Election of new (Chile) president is raising risk for delay in investments by companies, though it would not have near-term impact,” ANZ’s Kumari said.

* For the first nine months of the year, the copper market was in a 161,000 tonne deficit compared with a 239,000 tonne deficit in the same period a year earlier, the International Copper Study Group said.

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($1 = 6.3717 Chinese yuan)

Reporting by Eileen Soreng in Bengaluru; Editing by Vinay Dwivedi and Subhranshu Sahu

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