METALS-Copper heads for weekly gain on improved risk sentiment, stable dollar

(Updates prices, adds quotes)

July 23 (Reuters) – Copper advanced on Friday as improved risk sentiment and a stable dollar lifted prices of metals, while an extended policy easing in the European Union lent support.

Three-month copper on the London Metal Exchange rose 0.8% to $9,516 a tonne by 0512 GMT while the most-traded August copper contract on the Shanghai Futures Exchange advanced 1.7% to 69,810 yuan a tonne.

Both the contracts for copper, which is often used as a gauge of global economic health, are set to gain this week.

“We saw a slight bounce in equity markets yesterday as upbeat earnings help overcome worries about growth and together with a stable dollar it means metals can trade a bit more on their own fundamentals,” said commodities broker Anna Stablum of Marex Spectron.

“It is macroeconomic headwinds that are giving them a tough time to rally. Microeconomic for most of these metals look solid… thus lead, nickel and tin are performing well,” she added.

The European Central Bank’s pledge to keep interest rates at record lows for longer to boost recovery and a sluggish inflation also lent support.

“(This) might add to bullish sentiment. Loose monetary policy is a big reason why we are up here in the first place,” Stablum said.

FUNDAMENTALS

* The premium of LME cash lead over the three-month contract CMPB0-3 hit $21 a tonne, its biggest since June 29, indicating tightening nearby supply as LME inventories stayed at a one-year low MPBSTX-TOTAL and floods in Germany hit European production.

* ShFE nickel hit its highest since Feb. 26 at 143,940 yuan a tonne, tin climbed 3.9% to 234,580 yuan a tonne, hovering near a record high hit in the previous session, while lead touched an 11-month high at 16,315 yuan a tonne.

* LME nickel rose to a near five-month high at $19,305 a tonne and tin hit a record $34,500 a tonne.

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