London copper set to rise for 3rd week on demand recovery hopes

SINGAPORE: London copper was poised for a third straight weekly gain on Friday, supported by a quicker-than-expected recovery in Chinese activity and hopes for a global economic rebound as some major countries reopened after months-long lockdowns.

Three-month copper on the London Metal Exchange was up 1pc at $5,584.50 a tonne as of 0712 GMT and had gained 3.9pc on a weekly basis.

The most-traded July copper contract on the Shanghai Futures Exchange closed at a three-month high at 45,220 yuan ($6,384.57) a tonne.

Chinese government stimulus and backlog orders accumulated during the coronavirus-fuelled lockdowns have supported copper demand in top consumer China, while stimulus measures and reopening of economies in the West have also boosted investor sentiment.

"The balance of risks has shifted towards a more bullish near-term outlook for copper. The market has been quicker to price in a global growth rebound than we expected," Citi analysts said in a note.

Prices on Friday were also supported by market talks that China's National Food and Strategic Reserves Administration will stockpile copper to support prices, pushing demand in late Asian trading hours.

Reuters has not been able to confirm the authenticity of the information.

Citi expects the bull run in copper to continue in the coming months, but said risks remained, including a second wave of outbreak, a potential escalation in US-China trade tensions, and downside risks to the Chinese and global growth.

FUNDAMENTALS

ECB: The European Central Bank approved a bigger-than-expected expansion of its stimulus package on Thursday to prop up its economy.

PRICES: LME aluminium rose 0.4pc to $1,576.50 a tonne and ShFE aluminium increased 0.1pc to 13,180 yuan a tonne. London nickel rose 1pc to $12,905 a tonne and Shanghai nickel advanced 1pc to 103,970 yuan a tonne.