There were gains across the board for the London Metal Exchange base metals this morning, Wednesday January 20, with a weaker US Dollar Index and a firm commitment on further stimulus in the United States pushing copper and aluminium up by 1.2% and 1% respectively.
Copper's three-month price went back above the $8,000-per-tonne mark on Wednesday morning, after closing below it for three days in a row.
The red metal's price was at $8,052 per tonne at 9am this morning, up by 1.2% from Tuesday's closing price of $7,954 per tonne, which had been a small decrease from Monday's close of $7,971 per tonne.
A lower US Dollar Index, which was at 90.39 at 9am - the lowest it has been since January 14, when it came to 90.21 at the close - has supported higher base metal prices.
"The index eased for a third day after Janet Yellen, the new US Treasury Secretary, said the $1.9 trillion rescue package was needed to protect the economic recovery," Marex Spectron's LME Desk analyst Anna Stablum said.
"[On Yellen's confirmation hearing, held on Tuesday], she played down any problems debt might create and pointed to the low interest-rate environment that is here to stay," Stablum added.
Aluminium's three-month price was up by 1% at $1,983 per tonne at 9am.
This comes after two days of decline in the light metal price due to sizeable deliveries into LME warehouses these past two days, with the largest delivery,
of 112,500 tonnes, coming on Monday.
There was a fresh cancellation of 44,375 tonnes of aluminium this morning, with the majority of this - 43,275 tonnes - at LME warehouses in Port Klang, Malaysia, but a further 1,000 tonnes was freshly cancelled from warehouses in Toledo, the United States.
The other beneficiary of Wednesday's dollar dip was zinc, which was up by 1% to $2,711 per tonne at 9am.
Zinc's three-month price had been falling since January 12, when it was at $2,773 at the 5pm close, coming to $2,686 per tonne on Tuesday at 5pm, its lowest since November 16.
"We have been saying recently that it will be interesting to see the depth and durability of any pullback in the base metals to gauge how strong underlying sentiment is," Fastmarkets head of base metals and battery research William Adams said.
"Both zinc and aluminium recently set off lower but they already seem to have run into support, this after a 7.9% dip in zinc and a 7.2% dip in aluminium. So, for now underlying sentiment does seem robust and the complex's overall uptrend just pausing/consolidating, rather than stalling," he added.
Other highlights
Nickel's three-month price was at $18,190 per tonne at 9am, with the metal the only one to trade sideways on Wednesday morning, having had a Tuesday 5pm closing price of $18,215 per tonne - a 0.8% rise on the day. US President-elect Joe Biden will be inaugurated on Wednesday evening in Washington DC. A repetition of the civil unrest seen on January 6 when he was confirmed as the 46th president of the US could lead to market volatility.