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LONDON: Copper prices held steady on Friday after U.S. President Joe Biden embraced a bipartisan Senate infrastructure deal valued at $1.2 trillion over eight years, which helped reinforce expectations of stronger demand.
However, worries about the U.S. Federal Reserve tightening monetary policy sooner than expected subdued some of the optimism and weighed on copper prices in afternoon trade, traders said.
Benchmark copper on the London Metal Exchange was little changed at around $9,417 a tonne at 1605 GMT. Prices of the metal used in the power and construction industries are up around 5% this week.
“It’s been a U.S.-led week, the Fed is walking things back a bit and the infrastructure plan added to impetus,” said Citi analyst Oliver Nugent. “This is a year when demand growth is really all about the world outside China.”
Metals markets typically focus on China, which accounts for about half of global consumption of industrial metals.
INVENTORIES
Copper stocks in LME registered warehouses at 210,975 tonnes are up nearly 90% since May 12 and at their highest since July last year.
Most of that copper – 203,875 tonnes – is on warrant meaning it is available to the market.
“That is the highest on warrant number since the depth of the pandemic,” said Nugent, adding that demand for copper goods was high, but that consumers were using their inventories of the metal instead of buying it.
TIN: Yunnan Tin said in a regulatory filing it would suspend production at its main smelter from June 28 for no more than 45 days for maintenance.
“According to preliminary calculations by the company’s production department, the suspension of production has no significant impact on the company’s annual production plan,” it said.
The news, however, added to worries about severe shortages, which propelled tin prices to their highest in a decade to $33,181 a tonne earlier this month.
Three-month tin was up 0.5% at $30,800 a tonne.
OTHER METALS
Aluminium added 1.9% to $2,486, zinc fell 0.4% to $2,903, lead gained 0.2% to $2,225 and nickel climbed 0.8% to $18,545.