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Copper Prices Weighed Down by Firmer USD, Inventory Build-Up

Jan 18 (Reuters) - Copper prices eased on Tuesday as a firmer U.S. dollar made the greenback-priced metal expensive for holders of other currencies, and higher inventories in London Metal Exchange-registered warehouses eased some fears of supply tightness.

Three-month copper on the London Metal Exchange was down 0.1% at $9,720 a tonne, as of 0715 GMT. The most-traded March copper contract on the Shanghai Futures Exchange ended daytime trading down 0.2% at 70,100 yuan ($11,048.59) a tonne.

"The market is in consolidation mode... If inventory builds turn out to be smaller than expected, or we even start to see inventory drawdown post Lunar New Year, I believe investors then will be more comfortable to (go) long again," a Singapore-based trader said.

LME copper inventories were at 92,500 tonnes, their highest level since November 2021.

"An upward movement in copper prices may be triggered in the medium- to long-term due to faster adoption of electric vehicles worldwide," said Kunal Sawhney, chief executive officer of Kalkine Group.

The dollar strengthened 0.1%, as traders continued to hold on to dollars but took the view that Federal Reserve tightening plans were largely priced in.


* LME aluminium rose 0.6% to $3,015 a tonne, nickel was up 1.2% at $22,330, lead eased 0.1% to $2,353.5 and zinc gained 0.6% to $3,529.5. Tin climbed 1.7% to $41,980 a tonne, having earlier hit a record high of $42,000.

* ShFE aluminium was up 1% at 21,290 yuan a tonne, nickel rose 0.9% to 164,170 yuan, zinc edged 0.2% higher to 24,595 yuan and lead inched 0.1% lower to 15,615 yuan. Tin climbed 4% to 317,600 yuan a tonne, having earlier hit a record high of 319,700 yuan.

* "Tin may have more steam left as the demand for this soldering agent will not see any downtick... In the near-term, if China's tin inventories can ease some supply side pressures, a short-term downward pressure on tin prices may be observed," Sawhney said.

* The premium for cash nickel over the three-month contract surged to $495 per tonne, the highest since April 2009, suggesting tightness in nearby supplies. Nickel inventories in LME-registered warehouses were at 97,038 tonnes, the lowest in more than two years.

* Swedish mining and smelting group Boliden expects to resume nickel production at its Harjavalta smelter in the near future, it said on Monday.

* Leaders of a group of Peruvian communities said in a public hearing on Monday that they rejected a government proposal to prevent future blockades affecting MMG Ltd's Las Bambas copper mine. 

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($1 = 6.3447 Chinese yuan)

Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V, Sherry Jacob-Phillips and Subhranshu Sahu

Source: Reuters

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