The most-traded August copper contract rose to 46,380 yuan per tonne ($6,696) as at 10.54am Shanghai time, up by 230 yuan per tonne, or 0.5%, from Monday’s close of 46,150 yuan per tonne.
Copper prices gained support from the news that the strike at Chilean state-owned producer Codelco’s Chuquicamata copper mine has continued for four days with end in sight because "there are currently no conversations planned between the union and management", Daniel Been, analyst at ANZ Research, said in a morning note.
A decline in Chinese refined copper output last month provided further support to the red metal’s price.
Refined copper production in China dropped by 5.2% year on year to 711,000 tonnes in May, according to data from China’s National Bureau of Statistics (NBS) on Monday. May’s volume was also down by 3.9% from the prior month.
The rest of the SHFE base metals were mixed; zinc and lead were both up by 0.2%, while tin and nickel fell by 0.4% and 0.2% respectively and aluminium was little changed from its previous close.
The weakness in nickel comes amid lackluster physical and speculative demand for the metal, signaled by rising on-exchange stocks.
“Nickel prices fell as orders for the metals stored in LME warehouses dropped by the most in two years,” ANZ Research’s Been said.
Nickel stocks in London Metal Exchange warehouses rose by 4,026 tonnes to 167,148 tonnes on Monday, with 4,224 tonnes of material delivered into Johor warehouses. A total of 7,926 tonnes of nickel was re-warranted, leaving 30.9% of LME nickel stocks on canceled warrants from 38.8% in May.
Nickel stocks at SHFE-listed warehouses surged 53% last week, climbing by 5,835 tonnes to total 16,936 tonnes on June 14.
- The slight strength in zinc and lead prices on the SHFE this morning comes despite reports that Chinese production of both metals rose considerably last month.
- Chinese zinc output rose by 7.4% year on year to 480,000 tonnes in May, while lead production rose by 7.1% over the same comparison to 452,000 tonnes, according to NBS data.
- The dollar index was down by 0.05% at 97.46 as at 11.59 am Shanghai time.
- The Shanghai Composite Index was up by 2.31% at 2,889.93 as at 11.30 am Shanghai time.
- In US data on Monday, the Empire State manufacturing index, which measures manufacturing activity in the New York area fell to -8.6, its lowest reading since October 2016. The National Association of Home Builders (NAHB) housing index, which measures activity in single-family house market, fell to 64 in June versus 66 in May.
- In data on Tuesday, German and EU Zew economic sentiment, the EU’s consumer price index (CPI) and trade balance as well as US building permits and housing starts are of note.
- In addition, European Central Bank president Mario Draghi and Bank of England governor Mark Carney are due to speak.