Copper extends gains on tighter supply signs, softer dollar

Copper prices rose further on Monday, buoyed by signs of tightening supply and a softer U.S. dollar.

Three-month copper on the London Metal Exchange rose 0.23% to $9,925 per metric ton by 0702 GMT, heading for a third straight session of gains.

The most-traded copper contract on the Shanghai Futures Exchange gained 0.71% to 79,780 yuan ($11,153.52) a ton, rising for a second straight session.

Copper prices extended gains as imports arbitrage has turned profitable, with a recovery in spot premium suggesting tighter supply, analysts from ANZ said in a note.

"Prospects of slowing refined copper production also supported market sentiment," they added.

Copper production in top producer Chile edged up 0.3% year-on-year in July, while manufacturing production rose 2.7%, sharply slower than the 12% increase recorded in the previous month.

The dollar index, which measures the currency against six major peers, eased 0.15% to 97.69, having clocked a monthly decline of more than 2% on Friday.

A softer dollar makes greenback-denominated assets more affordable to holders of other currencies.

China's manufacturing sector contracted for the fifth consecutive month in August, as exports declined due to factors such as U.S. tariffs, a property sector downturn, and weak job security.

Profits at China's industrial firms fell for the third straight month in July, underscoring the challenges businesses face amid sluggish demand and ongoing factory-gate deflation.

Among other London metals, aluminium dipped 0.13% to $2,612 a ton, lead fell 0.03% to $1,990.5, and tin lost 0.47% to $34,855, while nickel gained 0.58% to $15,510, and zinc rose 0.53% to $2,834.

SHFE aluminium dipped 0.41% to 20,645 yuan, and tin lost 0.93% to 273,240 yuan, while lead strengthened 0.03% to 16,855 yuan, nickel climbed 1.77% to 123,450 yuan, and zinc gained 0.36% to 22,175 yuan.