LONDON: Copper prices rose on Friday, heading for a second weekly gain, on hopes of improved demand from top consumer China and lower inventories.
Three-month copper on the London Metal Exchange (LME) was up 0.2% at $8,361 a metric ton at 1600 GMT after touching the highest since May 11 at $8,451 and briefly breaking above the 200-day moving average of $8,381.
The metal used in the construction and power sectors is up 1.5% so far this week, moving further away from a six-month low touched on May 24, on expectations that China will launch a stimulus package.
“Base metals got a boost this week on hopes for Chinese stimulus measures after government advisors said Beijing should cut interest rates as part of a package of support policies amid country’s economic slowdown,” said ING analyst Ewa Manthey.
In the United States, a surge in weekly jobless claims raised hopes that a peak in the Federal Reserve rates was near.
Copper stocks on the Shanghai Futures Exchange declined 11.7% this week to a six-month low of 76,473 metric tons, while LME’s on-warrant copper stocks resumed their decline after Thursday’s gains.
Among other metals, LME aluminium rose 0.4% to $2,263 a metric ton. The market kept a close eye on rain forecasts in China’s main aluminium producing region Yunnan, where reduced hydropower generation kept part of the metal production capacity offline for months.
Hydropower generation in Yunnan has improved and a small amount of aluminium capacity there could resume in late June, according to Shanghai Metals Market.
Tin advanced 2.4% to $26,440 after touching its highest in more than a month of $26,600. Zinc eased 1.1% to $2,381, lead climbed 0.9% to $2,055 and nickel added 0.3% to $21,200.
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