Copper set for weekly gain on supply shortage, softer dollar

Copper futures were headed for a weekly rise on Friday, buoyed by a global shortage of copper concentrate and a weakening U.S. dollar.

Three-month copper on the London Metal Exchange rose 0.6% to $10,112 per metric ton by 0709 GMT and is poised to end the week 2.1% higher.

The most-traded copper contract on the Shanghai Futures Exchange gained 1.22% to 81,060 yuan ($11,384.67) a ton, and ended the week up 0.9%.

Adding to bullish sentiment in copper prices is a massive shortage of copper concentrate, said Michael Langford, CEO of graphene company Graphenovation.

In Australia, the earliest available copper concentrate is 18 months away, which is why so many copper smelters in Japan and Indonesia have stopped and in China reduced production, he said. Current copper futures prices do not fully reflect the market's supply-demand imbalance, he added.

The dollar index, which measures the U.S. currency against six major peers, is on track to record its second consecutive weekly decline. The greenback was under pressure after higher U.S. jobless claims and a modest increase in inflation reinforced expectations for Fed rate cuts next week.

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

Copper output in Peru, the world's third-largest copper producer, fell 2% year-on-year in July to 228,007 metric tons.

However, output for the first seven months of the year rose 3.3% compared to the same period last year, and the government expects annual production to slightly increase to 2.8 million tons in 2025.

Among other London metals, aluminium rose 0.52%, nickel climbed 1.42%, tin increased 0.71%, zinc gained 0.33%, and lead strengthened 0.25%.

SHFE aluminium rose 1.29%, nickel strengthened 1.27%, lead climbed 1.07%, tin gained 0.94%, and zinc was up 0.36%.