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    Base metals prices see uptick due to softer dollar

    July 31, 2024

    Key points:

    • Copper prices increased 1.5% to $9,108 per metric ton on the LME, while the Shanghai Futures Exchange saw a 0.8% rise to 74,100 yuan per ton.
    • Despite Wednesday’s gains, copper is on track for a 5.1% monthly decline, marking the largest drop since May 2023.

    Prices of nonferrous metals saw an upward movement on Wednesday, largely influenced by a softer dollar. This rise, however, comes in the shadow of a monthly downturn, driven by weak demand from China, the world’s largest consumer of these metals.

    The chart displays the 1-hour price movement of the Copper-C (Copper) commodity. The trend is up by 1.51%. The opening price is 4.0844, the closing price is 4.1460, the high is 4.1568, and the low is 4.0772. The chart includes moving averages (5, 10, 20, 30), showing an upward trend with prices above all moving averages. The MACD (26, 16, 9) histogram indicates bullish momentum, with the MACD line and signal line both trending upward. Trading volume shows consistent activity, with notable spikes during price increases. The chart reflects a bullish market sentiment for Copper.

    SEE: Copper performance on the VT Markets app.

    Three-month copper on the London Metal Exchange (LME) increased by 1.5% to $9,108 per metric ton as of 0623 GMT. Similarly, the most-traded September copper contract on the Shanghai Futures Exchange rose by 0.8% to 74,100 yuan ($10,245.14) per ton.

    This increase was supported by the dollar index trading lower, making dollar-priced metals cheaper for holders of other currencies.

    Copper still on a downward trajectory

    Despite the recent rise, LME copper has experienced a 5.1% loss so far this month, heading towards its most significant monthly fall since May 2023. This decline is largely attributed to the downturn in China’s manufacturing activity, which hit a five-month low in July.

    The manufacturing sector, a significant consumer of metals, has been grappling with falling new orders and low prices, indicating a challenging second half for the production powerhouse.

    Other metals also saw gains on Wednesday. LME aluminium rose by 1.3% to $2,252.50 per ton, nickel jumped 2% to $16,385, zinc advanced by 1.8% to $2,675.50, lead increased by 1% to $2,055, and tin climbed 4.1% to $29,970. Despite these daily gains, both aluminium and lead are set for their biggest monthly losses since June 2022.

    The physical demand for these metals needs to materialise to establish a floor price. Market analysts suggest that a swift price rebound could occur once Chinese buyers are willing to purchase – which indicates potential volatility in the market.

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