LONDON: Copper prices rose above $9,000 a tonne on Wednesday for the first time since June on hopes that Chinese demand will rebound after the country removed its COVID-19 restrictions.
Also helping prices was a weaker dollar. Expectations that US interest rates will soon stop rising have pushed the greenback to a seven-month low, making dollar-priced metals more affordable for buyers with other currencies.
Global equities rose ahead of US inflation data due on Thursday that markets predict will show a further slowing of price increases.
Benchmark copper on the London Metal Exchange (LME) climbed 2.4% to $9,129 a tonne by 1700 GMT, the fifth straight day of gains.
US Comex copper futures rose 2.1% to $4.16 a lb.
The metal used in power and construction has risen around 8% already this year.
Copper fell sharply in mid-2022 as the global economy slowed, interest rates rose and the dollar strengthened.
China’s retreat from its zero-COVID policy caused a huge spike in infections, but investors expect it to lift metals demand through the year.
“It does look as if the COVID wave (in China) has peaked already and that we could see a rapid pickup in activity from now,” said Capital Economics analyst Caroline Bain.
However, the Chinese industry was relatively resilient through zero-COVID, so demand for metals was unlikely to rebound as strongly as demand for energy, she said, adding that the copper market would be well-supplied in 2023 and prices may have risen too far too fast.
Analysts at the Minmetals Economic Research Institute said a solid break above resistance around $8,600-$9,000 may see prices rise towards $11,000.
On the supply side, a row in Panama deepened as the government doubled down on an order for First Quantum Minerals Ltd to halt operations at a copper mine.
LME aluminium advanced 1.3% to $2,495 a tonne, zinc gained 1.2% to $3,197.50 and tin jumped 3.5% to $26,760, but nickel shed 2.8% to $26,685 and lead slipped 0.9% to $2,180.50.
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