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Copper prices extended their gains on Tuesday as the dollar weakened and investors hoped that U.S. data would show inflation was easing.
Three-month copper on the London Metal Exchange CMCU3 added 0.4% to $8,975 a tonne by 1115 GMT after climbing by 0.9% on Monday.
“The dollar is weaker as a result of optimism that the pace of inflation is weakening,” said Geordie Wilkes, head of research at Sucden Financial.
A softer dollar index =USD makes commodities priced in the U.S. currency less expensive for buyers using other currencies.
The most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 gained 0.8% to 68,680 yuan ($10,070.23) a tonne.
Global shares also rose ahead of U.S. consumer price index data, due to be released at 1330 GMT, which is expected to show a rise of 6.2% in the 12 months to January, versus a rise of 6.5% in December.
Copper surged last month to a seven-month peak of $9,550.50 a tonne last month, largely on bets that the lifting of China’s strict COVID-19 controls would boost metals consumption.
Many analysts, including Wilkes, regard the rally as overblown since demand in top metals consumer China is still lacklustre.
“The reopening of the Chinese economy has not led to more consumption of materials and seems to be more focused on the consumer,” he said.
“It would be tricky to see a sustained rally at this point.”
Copper has been supported recently by disruptions at mines, including at the Grasberg mine in Indonesia, which operator Freeport-McMoRan FCX.N hopes can be partially restarted before end-February.
LME aluminium CMAL3 advanced 0.4% to $2,421.50 a tonne despite LME data MALSTX-TOTAL showing more inflows of inventories into LME approved warehouses, which have shot up 54% in about a week.
LME nickel CMNI3 rose 0.5% to $26,770 a tonne, zinc CMZN3 gained 0.5% to $3,112, lead CMPB3 edged up 0.2% to $2,101 while tin CMSN3 shed 0.1% to $27,510.