Copper rises due to supply risks, dollar weakness, and China projects

Copper prices rose Tuesday as supply risks were noted, with major producers offsetting demand concerns. At the same time, the weaker dollar makes the metal more attractive to holders of other currencies.

  • Copper rose 3.3% to $3.46 at $7,612 a tonne.

The dollar fell for the fourth straight session as traders await a decision from the Federal Reserve to raise interest rates.

MMG announced Monday that it has suspended its copper production target for this year after production fell 60% in the wake of prolonged protests at its Las Bambas mine in Peru.

Last week, Vale and Antofagasta lowered their forecasts for copper production in 2022.

“These miners (…) have been struggling to meet the bottom end of their guidance ranges and in some cases lowering below. That’s providing some offset to the slowing demand growth,”

said CRU analyst Craig Lang.

It was also positively influenced by China, the world’s largest copper importer, which announced plans to build new infrastructure.

The copper contract was driven by China’s infrastructure construction projects, which helped boost market confidence and spur buybacks.

The Ministry of Finance said Tuesday that China’s local government issued special bonds for infrastructure in June, more than double the amount in May and the highest monthly figure since 2019.

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