LONDON: Copper prices surged on Friday to the highest in 13 weeks as an unexpected increase in US employment in May fuelled hopes of a revival of global economic activity.
The payrolls data fed an optimistic mood on markets, with global equities extending their rally as coronavirus lockdowns ease and the European Central Bank ramps up stimulus measures.
Benchmark copper on the London Metal Exchange (LME) was up 2.9% at $5,692.50 a tonne at 1600 GMT after hitting the highest since March 5.
It has risen almost 6% this week, the biggest weekly gain since September 2018.
"The balance of risks has shifted towards a more bullish near-term outlook for copper," Citi analysts said. Prices could reach $5,750 within three months, they said.
Encouraging further buying, copper this week broke above its 100-day and 200-day moving averages at $5,417 and $5,656, respectively, and resistance around $5,540, the level of previous lows in 2017, 2019 and earlier this year.
Traders said copper was rising thanks in part to investors abandoning bets on lower prices. Speculative investors had cut their net short in LME copper to 5.5% of open contracts by Wednesday, brokers Marex Spectron said.
Prices were also supported by rumours that China's National Food and Strategic Reserves Administration will stockpile copper to support prices. Reuters has not been able to confirm the authenticity of this information.
Visible stockpiles continued to fall.
On-warrant inventories in LME-registered warehouses fell by 5,875 tonnes to 159,300 tonnes, the lowest since March 13.
Stocks in Shanghai Futures Exchange warehouses slipped by 5,075 tonnes to 139,913 tonnes in the week to Friday, the third consecutive weekly decline.
Benchmark aluminium was up 1.3% at $1,591.50 a tonne, zinc rose 0.6% to $2,045.50, nickel gained 1.7% to $12,995, lead added 1.9% to $1,774 and tin was 2.9% higher at $16,540. All have risen this week.
Comments
Comments are closed.