London copper rises to six-week high on US rate-cut optimism
Aug 27 (Reuters) -Copper prices in London rose nearly 1% on Tuesday to their highest levels in nearly six weeks, supported by optimism over a potential U.S. interest rate cut in September that could help lift demand for the red metal.
Three-month copper on the London Metal Exchange (LME) CMCU3 was up 0.8% at $9,365 per metric ton, as of 0251 GMT. Earlier in the session, copper increased as much as 1% to $9,385.50 a ton, the highest since July 19.
The most-traded October copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 climbed 0.9% to 75,020 yuan ($10,526.91) a ton, hovering near a three-week high hit in the previous session.
"The rise in copper of late can be attributed to the macro environment. Demand is still lagging behind, but the onshore macro players are looking further beyond," a trader said.
Market participants have been expecting an interest rate cut by the Federal Reserve next month, and the hope was reinforced by Fed Chair Jerome Powell's comments at a key conference last week.
A rate cut tends to boost economic growth and demand for metals, as well as pressure the dollar, which will eventually makes greenback-priced metals cheaper for holders of other currencies.
"A lot of the news are priced in already, so the next big jump will have to come from an improvement in fundamental demand. Otherwise it's not sustainable," the trader said.
LME nickel CMNI3 rose 1.3% to $16,980 a ton, aluminium CMAL3 fell 1.1% to $2,513.50, zinc CMZN3 eased 0.2% to $2,907.50, tin CMSN3 dropped 0.8% to $32,650 while lead CMPB3 was nearly flat at $2,117.50.
SHFE nickel SNIcv1 increased 1.4% to 132,320 yuan a ton, lead SPBcv1 advanced 0.4% to 17,695 yuan, while aluminium SAFcv1 fell 0.2% to 19,880 yuan, zinc SZNcv1 eased 0.3% to 23,975 yuan and tin SSNcv1 shed 0.7% to 265,820 yuan.
The LME cash nickel contract was trading at a discount of $220.10 a ton to the three-month contract, the smallest discount since May 16, indicating tightening nearby supplies. CMNI0-3
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Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips
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