Copper rises on strong economic data from top metals buyer China

LONDON: Copper prices gained on Monday after a strong economic reading from top consumer China confirmed a growth trajectory that has underpinned demand for industrial demand.

China's economy grew 6.5% in the previous quarter, faster than the 6.1% forecast by economists in a Reuters poll, as it recovered from the impact of COVID-19 and was poised to expand further this year.

Three-month benchmark copper on the London Metal Exchange (LME) gained 0.5% to $7,991 tonnes by 1242 GMT.

"The China data was pretty robust, not any great surprises there but just confirmation that China is back on track and that is a solid underpinning for metals," said independent analyst Robin Bhar.

POSITIONING: The LME net speculative long was seen at 45% of open interest as at Wednesday's close, levels last seen in Sept. 2017, estimates by broker Marex Spectron showed.

INVENTORIES: Total stocks of copper in warehouses registered with the LME slipped to their lowest since September at 97,675 tonnes.

SPREADS: The falling stocks have eased oversupply concerns, narrowing the discount of LME cash to the three-month contract to about $10 per tonne compared to $23 on Dec. 22.

The amount of cancelled inventory - stock earmarked for delivery - was high at 44% and fuelled concerns over a shortage of LME copper.

ALUMINIUM: China produced 37.08 million tonnes of aluminium in 2020, setting an annual record as smelters cashed in on soaring prices, with December output also hitting a monthly all-time high even as the rally cooled.

Stocks of aluminium in warehouses approved by the LME jumped 112,000 tonnes to 1.39 million tonnes.

OTHER PRICES: LME aluminium shed 0.5% to $1,982 per tonne, zinc fell 0.7% to $2,681, lead gained 0.4% to $2,004, tin added 1.1% to $21,325 while nickel increased 0.7% to $18,140.