By Onome Amuge
Copper prices jumped to their highest in nearly five months, as softer-than-expected
U.S. inflation data raised optimism for a slower pace of interest rate hikes which is expected to support demand for copper and other base metals.
Three-month copper on the London Metal Exchange (LME) rose 1 percent to $8,354.5 a tonne, its highest value since June 16. The most-traded December copper contract on the Shanghai Futures Exchange was up 1.8 percent to a four-month high at 67,830 yuan or $9,445.89 a tonne.
Market data showed that U.S. consumer prices rose lower than expected in October, pushing the annual increase below eight percent for the first time in eight months. This, according to analysts, indicated strong signs that inflation was slowing, which would allow the Federal Reserve to scale back its aggressive interest rate hikes.
Among other factors supporting the copper market was a decline in global supplies, as copper inventories on LME warehouses dropped 950 tonnes, trimming headline levels to 80,025 tonnes, the lowest in 7-1/2 months.
Other base metals on the LME also traded on a bullish territory on the LME except lead which lost 0.5 percent to $2,088.50 a tonne. Meanwhile, aluminium gained 0.7 percent at $2,343 a tonne, zinc advanced 1.2 percent to $2,919.50 a tonne, and tin rose 2.3 percent to $20,800 a tonne.
On the Shanghai Futures Exchange, tin climbed 6.4 percent to 179,270 yuan a tonne, nickel advanced 4 percent to 206,170 yuan a tonne, aluminium was up 1 percent to 18,735 yuan a tonne, and zinc rose 0.6 percent to 23,725 yuan a tonne.
