LONDON: Copper prices firmed on Wednesday alongside a rebound in equities and a weaker dollar, though investor fears over rising coronavirus cases limited gains.
Three-month benchmark copper on the London Metal Exchange (LME) was up 1.3% at $9,440 per tonne at 1620 GMT.
Expectations for a boom in copper demand in the transition to a lower carbon economy and global economic recovery have pushed prices back up towards a near 10-year high of $9,617 a tonne hit in February.
“Prices are recovering a little in line with recent developments in stock markets which came back after sharp losses yesterday,” said Quantitative Commodity Research consultant Peter Fertig.
“The outlook for copper demand is positive but it might be a bumpy road ahead depending on coronavirus infections.”
Early indications of a rebound in European corporate earnings supported prices while a weaker dollar made commodities more attractive.
Miners BHP Group and Antofagasta posted lower quarterly copper production due to COVID-19 restrictions on their workforce in Chile. But BHP still raised its guidance for this year.
The pace of China’s massive inoculation campaign has slowed, Reuters calculations showed. Meanwhile, cases are rising in India and Japan.
Inventories of copper in LME-registered warehouses continued their downward trend, falling 900 tonnes to 159,450 tonnes. Last week, they touched their highest since November.
The amount of cancelled inventory - stock earmarked for delivery - was high at 48%, usually a sign of a shortage of metal.
The LME cash copper contract is at a premium of about $8 a tonne over the three-month contract, indicating a low availability of nearby metal.
China’s refined copper output rose 18.2% year-on-year in March but the monthly total of 870,000 tonnes was the lowest since July, data from the National Bureau of Statistics showed.
LME aluminium rose 2.5% to $2,367 a tonne, after touching its highest since May 2018.
Zinc was steady at $2,814 a tonne, lead gained 0.1% to $2,031 a tonne, tin added 0.4% to $26,925 a tonne, and nickel gained 0.7% to $16,150 a tonne.
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