LONDON: Copper rose on Tuesday as sentiment around AI stocks recovered and demand strengthened in top consumer China, although a firmer dollar capped gains.
Benchmark three-month copper on the London Metal Exchange was up 0.7 percent at USD14,430 a metric ton in official open outcry activity, having earlier touched USD14,485, its highest since October 16.
Prices were finding support from rebounding AI stocks, with demand for the metal expected to benefit from AI infrastructure expansion, and supply remained constrained, particularly in China, said ING commodities strategist Ewa Manthey.
The surge in the Yangshan premium — the closely watched gauge of China’s appetite for copper imports that hit a nearly 13-year high of USD188 a ton on Tuesday — highlights the scramble for available metal, Manthey added.
“That tightness should continue to provide a floor under prices, although at these elevated levels we could see some resistance from price-sensitive demand.”
The cash LME copper contract last traded at a USD199.50-a-ton premium over the three-month forward, indicating near-term tightness. The premium earlier traded at USD206, the most since August 27.
LME copper stocks rose last week, but the heavy concentration of the inventories in North America added to concerns about regional supply bottlenecks.
“US inventory accumulation continues to limit the headline price, while tight ex-US availability and constrained concentrate supply preserve the underlying support,” Sucden Financial said in a note. In China, stocks have waned as smelters there entered maintenance. Last week, Shanghai Futures Exchange copper stocks fell more than 25 percent to 54,356 tons.
The rest of the LME complex was broadly positive on improving macroeconomic sentiment, although a stronger dollar, which makes greenback-denominated metals more expensive for investors using other currencies, applied some pressure.
Aluminium advanced by 0.7 percent to USD3,062 per ton, touching a two-week peak, while zinc was up 0.4 percent at USD3,828, having notched its highest since September 30.
Nickel added 0.5 percent to reach USD15,645 and tin gained 0.4 percent to USD51,240, while lead was the laggard, falling 0.2 percent to USD1,919.
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