METALS-Shanghai copper scales a more than two-month peak on supply fears

(Adds comments, updates prices)

By Eileen Soreng

Jan 13 (Reuters) – Copper prices in China hit a more than
two-month high on Thursday, supported by concerns of supply
tightness amid persistent low inventories.

The most-traded February copper contract on the Shanghai
Futures Exchange was up 1.6% at 71,630 yuan
($11,260.81) a tonne by 0600 GMT. It had touched 72,500 yuan
earlier in the session, the highest since Oct. 21.

“Copper prices are reflecting the continuation of low
visible inventories across exchanges,” CRU analyst Craig Lang
said, adding that logistical constraints and a closed ShFE-LME
arbitrage window have been impacting imports into China
recently.

Meanwhile, good growth in green energy-related sectors is
expected to continue to support demand and sentiment, Lang said.

Inventories in warehouses monitored by the Shanghai Futures
Exchange were last at 29,182 tonnes, close to a
more than a decade low of 27,171 tonnes seen in December.
On-warrant LME copper inventories were at 80,300
tonnes, down about 66% from August 2021 highs.

The threat of a strike at Teck Resources Ltd’s
Highland Valley copper mine in British Columbia added to supply
tightness fears.

Three-month copper on the London Metal Exchange was
down 1.3% at $9,925 a tonne, but held closer to the previous
session’s high of $10,072, level last seen in October.

“U.S. inflation is at multi-year highs, and it is expected
that efforts to control this rise will be a headwind for
(copper) prices,” said Neil Welsh, a metals broker at Britannia
Global Markets.

U.S. consumer prices increased solidly in December which
bolstered expectations that the Federal Reserve will start
raising interest rates as early as March.

FUNDAMENTALS

* LME aluminium was down 1% at $2,951 a tonne,
nickel slipped 1% to $21,835 a tonne, lead
dipped 0.5% to $2,334.5 a tonne, zinc fell 0.8% to
$3,525 a tonne and tin was down 0.4% at $41,225 a tonne.

* ShFE aluminium fell 1% to 21,435 yuan a tonne,
while nickel was up 0.7% at 162,020 yuan, having
earlier hit a record high of 165,680 yuan. Zinc edged
0.2% higher to 24,775 yuan, lead rose 0.9% to 15,375
yuan and tin eased 0.4% to 308,110 yuan.

* Indonesia, the world’s biggest thermal coal exporter, has
allowed 37 loaded coal vessels to depart after they secured
approvals from authorities.

* For the top stories in metals and other news, click
[TOP/MTL] or [MET/L]

($1 = 6.3610 Chinese yuan)

(Reporting by Eileen Soreng in Bengaluru; Editing by Shounak
Dasgupta)
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