Copper slips as inventories build; weak dollar offers support
XLB•Copper eases as stocks rebuild
Copper prices slipped on Thursday as more inventories arrived in warehouses, but losses were modest due to a weaker dollar after the U.S. government moved to calm the bond markets.
Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.4% at $13,988 a metric ton by 1025 GMT, having added 0.5% in the previous session.
LME copper hit a six-month peak on Monday on worries about low inventories, but has eased since then as a flow of metal replenished storage facilities.
Other London metals mostly lower
Among other metals, LME aluminium CMAL3 lost 1% to $3,196 a ton and nickel CMNI3 shed 1.3% to $16,890, while zinc CMZN3 gained 1.2% to $3,751, lead CMPB3 rose 0.1% to $1,890 and tin CMSN3 added 0.3% to $55,705.
Dollar weakness and Treasury move lend support
"Yesterday's buyback announcement from the Treasury helped arrest the slide that we saw as inventories started to return to the LME," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"The announcement sends quite a strong signal and points to the risk of a weaker dollar ahead. It also highlights a world where there's competition for investors not only to fund debt, but also for hard assets, and copper has been at the forefront of that recently."
The dollar index =USD fell to a three-month low after the Treasury Department moved to calm a bond market selloff that had pushed long-end yields to their highest since 2007.
A weaker dollar makes commodities priced in the U.S. currency cheaper for buyers using other currencies.
