Copper prices remained close to their two-month highs on Tuesday, driven by growing expectations that the US Federal Reserve might cut interest rates. This anticipation placed pressure on the dollar, which further influenced the metals market.
On the London Metal Exchange (LME), three-month copper saw a slight increase of 0.1%, reaching $9,396 per metric ton by mid-morning. The metal had touched $9,466.5 during the previous trading session, a level that had not been seen since mid-July.
Traders noted that both copper and aluminium were trading within a narrow range as investors adjusted their positions ahead of the Fed’s upcoming interest rate decision. Aluminium, like copper, edged up by 0.1% to $2,331.5, with a notable futures position indicating demand for aluminium in October and sales planned for November.
The primary factor supporting the upward movement in metals prices was the weakening US dollar, which had dropped to near a one-year low. A softer dollar tends to make dollar-denominated metals less expensive for holders of other currencies, enhancing their appeal in international markets.
However, not all metals enjoyed the same level of support. Zinc and lead prices were hit by a rise in inventories at Singapore warehouses, which are overseen by the LME. Zinc fell by 0.9% to $2,921, while lead dropped 0.8% to $2,022. Lead inventories saw a significant increase of 17%, with an additional 30,225 tonnes, pushing the total to 205,000 tonnes. Zinc inventories also rose, with an extra 12,950 tonnes added.
Despite these inventory increases, traders pointed out that such figures do not necessarily reflect changes in supply and demand dynamics for zinc and lead. The large flows of these metals in and out of Asian warehouses over recent months have primarily been driven by rent deals rather than shifts in consumption or production.
Elsewhere in the market, nickel inched up 0.2% to $16,250, while tin dipped slightly by 0.4%, settling at $31,800 per ton.
While copper and aluminium showed resilience amid a weaker dollar, the broader market remains cautious ahead of the Fed’s decision, with metals like zinc and lead facing challenges from rising inventories.
Jubilee Metals Group plc (LON:JLP) is a diversified metal recovery business with a world-class portfolio of projects in South Africa and Zambia. The Company’s expanding multi-project portfolio across South Africa and Zambia provides exposure to a broad commodity basket including Platinum Group Metals, chrome, lead, zinc, vanadium, copper and cobalt.
