METALS-Weaker dollar, Fed cut bets drive copper up

By Polina Devitt

LONDON, Oct 15 (Reuters) - Copper prices rose on Wednesday with support from a weaker dollar, expectations of more U.S. interest rate cuts and hopes for more stimulus in top metals consumer China.

Three-month copper on the London Metal Exchange CMCU3 added 0.5% to $10,624 a metric ton by 1608 GMT

Inflow of investment into hard assets and worries about the reduced mine supply after disruptions in Indonesia, the Democratic Republic of Congo and Chile saw copper hitting its 16-month high of $11,000 on October 9.

These disruptions have largely exhausted the allowance for unexpected production accidents which analysts added to their 2025 supply-demand balance estimates for the metal, used in power and construction.

"So, further changes between now and end-December could tighten the market," said Amy Gower, commodities strategist at Morgan Stanley.

The dollar weakened as Federal Reserve Chair Jerome Powell left the door open to further rate cuts in Tuesday's speech.

A weaker U.S. currency makes dollar-priced metals more attractive for buyers using other currencies, while the prospect of lower interest rates supports their industrial demand outlook.

In top metals consumer China, hopes for fresh monetary stimulus were high after data showed that deflationary pressures persisted in September amid a prolonged property market slump and trade tensions with the U.S.

Outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy which is typically used by analysts as a gauge of industrial metals demand in China, rose 8.7% year-on-year, slowing from August's pace of 8.8%.

Meanwhile, the premium for the LME cash copper contract against the three-month one continued to fall and was last at $28 a ton. It widened to $227, its highest since June, on Monday due to the activity ahead of Wednesday, when short position holders have to cut or rollover their contracts.

For zinc, the premium CMZN0-3 fell to $150 a ton from Monday's $202. Tight zinc stocks in the LME-registered warehouses - currently at their lowest level since early 2023 - make zinc vulnerable to price volatility, Gower said.

LME aluminium CMAL3 rose 0.6% to $2,753.5 a ton, zinc CMZN3 edged up 0.1% to $2,944, lead CMPB3 also nudged 0.1% higher to $1,982.5, tin CMSN3 was up 0.8% at $35,420, while nickel CMNI3 climbed 0.4% to $15,185.