- Three-month copper on the London Metal Exchange (LME) rose 1.7% to $6,341 a tonne by 1150 GMT after touching its highest since May 2019 at $6,360.
- The fundamental backdrop is improving and clearly copper is reflecting hopes of a V-shaped or U-shaped economic recovery.
LONDON: Copper prices hit their highest in over a year on Thursday, spurred by hopes of a faster recovery in top consumer China and supply concerns in the world's biggest producer Chile.
Three-month copper on the London Metal Exchange (LME) rose 1.7% to $6,341 a tonne by 1150 GMT after touching its highest since May 2019 at $6,360.
The metal, used as a gauge of economic health, is up 2.7% so far this year and has largely recovered from a selloff caused by the novel coronavirus.
"The fundamental backdrop is improving and clearly copper is reflecting hopes of a V-shaped or U-shaped economic recovery," independent metals consultant Robin Bhar said.
"The key driver is the disruptions in Chile. That is sending some alarm through the market, and although the closures are temporary, they could be sizable."
CHILE: Unions at top copper producer Codelco in Chile said on Wednesday nearly 3,000 workers had been infected with the coronavirus, prompting renewed calls for safety measures.
CHINA DATA: China's factory gate prices fell for a fifth straight month in June although signs of a pickup in some parts of the sector suggest a slow economic recovery remains intact.
POSITIONING: Speculators have bet prices for LME copper will rise, with the net long climbing to 11% of contracts as of Tuesday, estimates from broker Marex Spectron showed.
INVENTORIES: On-warrant stocks of copper in LME-registered warehouses continued a downward trend, shedding 4,000 tonnes to 94,800 tonnes, the weakest since January.
SPREADS: Concerns over diminishing supply helped drive the premium for cash over the three-month contract
The premium stood at just under $1 on Thursday.
PRICES: LME aluminium hit a four-month high, jumping 1.4% to $1,695 a tonne, zinc gained 0.6% to $2,146, lead added 0.9% to $1,830, tin rose 1.7% to $17,370 while nickel held steady at $13,485.