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METALS-Copper rises on signs of higher demand but dollar caps gains

METALS-Copper rises on signs of higher demand but dollar caps gains

· 03/17/2021 09:14
METALS-Copper rises on signs of higher demand but dollar caps gains

Updates throughout, changes dateline from HANOI

By Zandi Shabalala

- Copper climbed on Wednesday on indications for higher demand for the metal, though gains were capped by rising inventories and as the dollar firmed ahead of a U.S. Federal Reserve statement.

Three-month copper on the London Metal Exchange CMCU3 (LME) rose 0.7% to $9,023 per tonne by 1250 GMT, having touched a 9-1/2 year peak of $9,617 last month.

"We are still in a long term constructive environment for copper. Generally commodities are in a bull market given some of structural changes in terms of demand for energy metals," said WisdomTree analyst Nitesh Shah.

Data from top metals consumer China showed stronger-than-expected industrial growth in the first two months of 2021, while new lending in the country fell less than expected in February. nL1N2LD02Z nL4N2L62P4

U.S. FED: Investors were cautious as the U.S. central bank ends a closely anticipated two-day meeting on Wednesday, after a sharp rise in U.S. Treasury yields this year on expectations for stronger growth and inflation. MKTS/GLOB

The dollar gained ahead of the expected Fed statement .DXY.

INVENTORIES: Capping price gains were more inflows into warehouses registered with the LME. Total stocks have jumped 44% in the last two weeks to 107,275 tonnes MCUSTX-TOTAL.

SPREADS: The premium of the LME cash copper contract over the three-month contract has eased to about $4 a tonne compared with $62.30 on Feb 26, which was its highest in two years MCU0-3.

SUPPLY: China's refined copper output in the first two months of 2021 rose 12.3% year-on-year to 1.63 million tonnes, data released by the National Bureau of Statistics showed.nB9N2HA021

For the first 11 months of 2020, the 24 million tonne global refined copper market was in a 589,000 tonnes deficit compared with a 427,000 tonnes deficit in the same period a year earlier, the International Copper Study Group said. nAPN0479SD

OTHER METALS: LME aluminium CMAL3 rose 1.1% to $2,2270 a tonne, zinc CMZN3 climbed 0.4% to $2,822, lead CMPB3 added 0.4% to $1,942, tin CMSN3 gained 3.3% to $25,820, and nickel CMNI3 declined 0.2% to $16,115.

(Reporting by Zandi Shabalala, additional reporting by Mai Nguyen; Editing by Steve Orlofsky)


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