LONDON: Copper prices hit a more-than-five-month high on Friday, lifted by expectations of US interest rate cuts and concerns over potential supply shortages.
Three-month copper on the London Metal Exchange gained 0.2 percent to USD10,069 per metric ton by 1600 GMT after touching USD10,126, its highest since March 26.
The metal is up by about 15 percent this year but has repeatedly struggled to sustain gains above the psychological USD10,000 level. Base metals tracked broader markets higher after US data on Thursday showed a surge in jobless claims, reinforcing expectations the Federal Reserve will cut rates.
“I think the consensus was a quarter-point cut, but now I think it may be more. So I think that’s given the markets a lift, and the bullish sentiment helped copper,” said Robert Montefusco at broker Sucden Financial.
“CTAs were buying dips under USD10,000, pushing it higher. That got us going and then the Chinese came to the party overnight.” Commodity Trade Advisor (CTA) investment funds are largely driven by computer programs based on technical signals.
The most traded copper contract on the Shanghai Futures Exchange gained 1.22 percent to 81,060 yuan (USD11,384.67) a ton. Also supporting prices were worries about supply.
Mining operations at the massive Grasberg copper mine in Indonesia - one of the world’s biggest - remained suspended on Friday as a search continued for workers trapped after parts of the mine became blocked.
Copper output in Peru, the world’s third-largest copper producer, fell 2 percent year on year to 228,007 metric tons in July.
Nickel climbed 1.7 percent to USD15,400 a ton after a task force in top producer Indonesia seized large plots from nickel miners in a crackdown on the illegal exploitation of natural resources. Zinc also pushed higher, advancing 1.9 percent to a five-month peak of USD2,956, as LME stocks continued to erode.
LME zinc inventories fell to 50,525 tons, their lowest since November 2023, data showed on Friday and are down 78 percent so far this year.
Among other metals, LME aluminium rose 0.8 percent to USD2,695 a ton, its highest since July 29, lead gained 1.2 percent to USD2,019 and tin added 0.9 percent to USD35,025.
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