(Updates with prices)
By Zandi Shabalala
LONDON, July 22 (Reuters) – Copper prices gained on Thursday, buoyed by a softer dollar, dwindling inventories and a revived risk appetite.
Benchmark copper on the London Metal Exchange (LME) rose 1.1% to $9,451 a tonne by 1635 GMT.
“We have micro drivers which are still supporting the market due to the tightening of supply,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity.
He said the spread of the Delta coronavirus variant could prompt the U.S. Federal Reserve to back off from tightening monetary policy too quickly in the world’s largest economy.
“The market is still waiting for more signs of monetary fiscal policy but my guess is that copper will break on the upside as we are in a bull market and every dip is being bought.”
DOLLAR: The safe-haven dollar was on the back foot after retreating from multi-month highs as strong earnings lifted Wall Street stocks, making dollar-priced metals cheaper for holders of other currencies.
INVENTORIES: On-warrant LME stocks of copper <MCUSTX-TOTAL> – those not earmarked for delivery – fell to 210,775 tonnes but have been on an upward trajectory since February.
PREMIUMS: The Yangshan copper premium <SMM-CUYP-CN> rose to $41 a tonne, its highest since May 7, indicating strengthening demand for imported metal into China.
FORCE MAJEURE: Lead hit a three-year high of $2,404 a tonne after German lead producer Berzelius Stolberg declared force majeure on metal shipments from its Stolberg smelter because of floods. The price later eased slightly to stand 2.1% up at $2,387.
The premium for LME cash lead over the three-month contract <CMPB0-3> expanded to $21.70 a tonne, its highest since June 30, indicating tightening nearby supplies.
OTHER METALS: Aluminium rose 1.2% to $2,485 a tonne, zinc gained 0.1% to $2,933, tin added 2% to a record high of $34,100 and nickel was up 1.8% at $18,920. (Reporting by Zandi Shabalala Editing by David Evans and David Goodman)