Copper climbs as dollar hits multi-year lows; aluminium surges on weak inventories

Copper climbed on Wednesday after the U.S. dollar slid to a four-year low, while aluminium surged to multi-year highs on supply woes.

The most active copper contract on the Shanghai Futures Exchange (SHFE) closed daytime trading up 0.28% at 103,060 yuan a metric ton.

The benchmark three-month copper on the London Metal Exchange, meanwhile, rose 1.32% to $13,178 a ton as of 0700 GMT.

Both contracts hovered below record levels set this month. The dollar index on Tuesday hit its lowest since February 2022 after President Donald Trump said that the value of the greenback was "great", when asked his thoughts on its recent weakness.

A weaker dollar supports commodities traded with the greenback, making it cheaper for investors using other currencies. Copper also continues to be supported by supply constraints following mine disruptions and regional dislocations due to U.S. tariffs concerns.

Elsewhere, aluminium is having a strong run, as the most traded contract in Shanghai surged 5.75% to 25,605 yuan a ton, after rising as much as 5.92% earlier, leading gains among SHFE base metals. The benchmark three-month aluminium also led gains in London, rising 3.09% to $3,306 a ton. This came after it surged 3.34% to $3,314, a more than three-and-a-half-year high. Goldman Sachs on Tuesday lifted its first-half outlook for the metal to $3,150 a ton from $2,575, attributing the hike to low global inventories, power availability worries for new smelters in Indonesia and firm global demand. Tin also surged, with Shanghai tin climbing 2.11% and London benchmark rising 2.59%.

"The current price spike reflects a growing disconnect between prices and fundamentals," said Tom Langston, senior market analyst at International Tin Association. "As a relatively small and illiquid market compared to the rest of the base metals, investment funds can exert outsized influence, leading to heightened volatility."

Among other SHFE base metals, zinc rose 2.42%, lead advanced 0.23%, and nickel declined 1.31%.

Elsewhere on LME, zinc rose 1.85%, lead added 0.27%, and nickel gained 0.83%.