Copper ticks down as dollar weighs ahead of China return

Copper nudged down in subdued trading on Tuesday, weighed by dollar gains and as the market awaited the return of main consumer China to gauge buying interest there. Benchmark three-month copper on the London Metal Exchange was down 0.16% at $14,397 a metric ton by 0701 GMT. The Shanghai Futures Exchange was closed for China's National Day and will reopen on October 8, when the market will be closely watching the return of Chinese buyers. "Renewed physical buying could extend the recovery, while a muted response would leave the complex vulnerable to high US yields, dollar strength and further profit-taking," analysts from Sucden Financial said in a note. The US dollar's rally continued, as the currency rode Treasury yields higher. In copper, the gains offset support from strong stock market performance. A stronger greenback makes dollar-denominated commodities more expensive for buyers using other currencies. Asian stocks rose, tracking the previous day's gains on the tech-heavy Nasdaq, which closed at a record high. Copper has benefited from demand expectations tied to the AI infrastructure buildout, electric grid upgrades and electric vehicles. Rate traders are pricing in a 22% chance the US Federal Reserve will raise rates at its October meeting, down sharply from 51% a week ago, according to the CME's FedWatch tool. Higher interest rates can constrain demand for growth-dependent commodities like copper by dampening economic activity. Aluminium gained 0.24%. Prices for the light metal have fallen by more than 17% since hitting a four-year high in June, weighed by easing worries about supply from the Gulf region and expectations of new production capacity in Indonesia. In August, Indonesia exported more than 150,000 tons of primary and unwrought alloyed aluminium, more than three times the amount exported a year earlier, data from the country's statistics bureau showed on Monday. Among LME metals, zinc dipped 0.19%, lead dipped 0.08%, nickel lost 0.57% and tin added 0.16%.