METALS-Copper strides to five-month peak on hopes for US rate cuts

By Eric Onstad

LONDON, Sept 12 (Reuters) - Copper prices hit a more-than-five-month high on Friday, lifted by expectations of U.S. interest rate cuts and concerns over potential supply shortages.

Three-month copper CMCU3 on the London Metal Exchange gained 0.2% to $10,069 per metric ton by 1600 GMT after touching $10,126, its highest since March 26.

The metal is up by about 15% this year but has repeatedly struggled to sustain gains above the psychological $10,000 level.

Base metals tracked broader markets higher after U.S. data on Thursday showed a surge in jobless claims, reinforcing expectations the Federal Reserve will cut rates. MKTS/GLOB

"I think the consensus was a quarter-point cut, but now I think it may be more. So I think that's given the markets a lift, and the bullish sentiment helped copper," said Robert Montefusco at broker Sucden Financial.

"CTAs were buying dips under $10,000, pushing it higher. That got us going and then the Chinese came to the party overnight."

Commodity Trade Advisor (CTA) investment funds are largely driven by computer programs based on technical signals.

The most traded copper contract on the Shanghai Futures Exchange SCFcv1 gained 1.22% to 81,060 yuan ($11,384.67) a ton.

Also supporting prices were worries about supply.

Mining operations at the massive Grasberg copper mine in Indonesia - one of the world's biggest - remained suspended on Friday as a search continued for workers trapped after parts of the mine became blocked.

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

Nickel CMNI3 climbed 1.7% to $15,400 a ton after a task force in top producer Indonesia seized large plots from nickel miners in a crackdown on the illegal exploitation of natural resources.

Zinc CMZN3 also pushed higher, advancing 1.9% to a five-month peak of $2,956, as LME stocks continued to erode.

LME zinc inventories MZNSTX-TOTAL fell to 50,525 tons, their lowest since November 2023, data showed on Friday and are down 78% so far this year.

Among other metals, LME aluminium CMAL3 rose 0.8% to $2,695 a ton, its highest since July 29, lead CMPB3 gained 1.2% to $2,019 and tin CMSN3 added 0.9% to $35,025.

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