METALS-Copper pushes to near three-month peak on weak dollar, premiums rebound

By Eric Onstad

LONDON, June 26 (Reuters) - Copper prices jumped to their highest level in nearly three months on Thursday, propelled by a weak dollar, concerns over supply and buying by speculators after key technical levels were broken.

Three-month copper on the London Metal Exchange CMCU3 gained 1.9% to $9,896.50 a metric ton by 1605 GMT, its strongest level since March 27.

"What is key for us is dollar weakness, and that is trending lower, which is supportive for our space," said Alastair Munro, senior metals strategist at Marex.

The dollar index .DXY sank to its lowest level since early 2022 as concerns about the future independence of the U.S. Federal Reserve undermined faith in the soundness of the country's monetary policy. FRX/

A softer dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies.

The premium for the LME cash copper contract over the three-month contract CMCU0-3 rebounded to $310 a ton, its highest since November 2021, from $101 on Wednesday.

The LME premium for buying copper tomorrow and selling it the day after MCUT-0=LX surged to $98 a ton up from $48.60 per ton on Friday.

While traders expect deliveries of copper into LME warehouses to ease a tight situation, they have not yet materialised.

"The market is still positioned short out of July and struggling to find offers this morning," Munro said.

Copper buying was buoyant among Chinese participants, he added, noting that long positions and open interest are rising on the Shanghai Futures Exchange.

The most-traded copper contract on ShFE SCFcv1 rose 0.6% to 79,000 yuan ($11,022.74) per ton, its highest since June 11.

LME copper has held below the $9,800 level for several months and a break above it on Thursday triggered automatic buy orders, a trader said.

LME copper has gained 22% since hitting its lowest level since November 2023 at $8,105 in April.

U.S. Comex copper futures HGc4 climbed 3.1% to $5.13 a lb, bringing the premium of Comex over LME copper to $1,403 a ton, its highest since April 25.

Higher U.S. copper prices are based on expectations of U.S. tariffs being imposed on the metal, triggering a flow of metal to Comex warehouses.

Among other metals, LME aluminium CMAL3 rose 0.9% to $2,585.50 a ton, lead CMPB3 added 0.4% to $2,041, nickel CMNI3 gained 0.8% to $15,195, zinc CMZN3 jumped 2.4% to $2,770, while tin CMSN3 climbed 1.9% to $33,825.

Zinc hit its highest since May 14, while tin touched its strongest since April 8.

($1 = 7.1670 Chinese yuan )