Tuesday, September 26, 2023

Shanghai copper at 1-week high after US loan deal

by Mai Nguyen

(Reuters) – Copper prices in Shanghai rose to their highest in a week on Monday, following a deal to lift U.S. government debt limits, as appetite for riskier assets improved.

* The most-traded July copper contract on the Shanghai Futures Exchange (SHFE) rose 2.1% to 65,210 yuan ($9,434.18) a tonne after touching 65,350 yuan a tonne earlier in the session, a level not seen in a week Went.

* US President Joe Biden and House Speaker Kevin McCarthy reached an agreement on Saturday to avoid an economically destabilizing default and suspend the $31.4 trillion debt ceiling through 2025.

* The deal now must go through a deeply divided Congress and, if approved, would prevent the US government from defaulting on its debt.

* However, the pace of recovery in the Chinese economy, the metals’ main consumer, is gradually slowing, and general macroeconomic sentiment is bearish, limiting support for copper, Jinrui Futures said in a note to clients.

* Among other industrial metals, SHFE aluminum was up 0.9% to 18,025 yuan a ton, zinc up 2.4% to 19,420 yuan a ton, nickel up 0.6% to 162,140 yuan a ton, lead up 0.1% to 15,240 yuan a ton , while tin rose 4.2% to 208,210 yuan per ton.

* The London Metal Exchange (LME) will be closed on Monday for a public holiday.

* SHFE’s copper inventories fell to 86,177 tonnes on Friday, the lowest level since January 6. However, stocks of the metal in LME-approved warehouses rose to 97,725 tonnes on Thursday, the highest level since November 2022.

* Meanwhile, Chinese industrial firms’ profits declined in the first four months of 2023, official data showed on Saturday, as firms continued to grapple with margin pressure and weak demand amid a weak economic recovery. ,

(1 dollar = 6.9121 yuan)

(Reporting by Mai Nguyen in Hanoi; Editing in Spanish by Ricardo Figueroa)

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