Eighth weekly gain takes copper back to pre-COVID prices

LONDON: Copper was set for its eighth consecutive weekly gain on Friday, with prices back to pre-coronavirus crisis levels as Chinese demand rebounds and speculators turn bullish on the metal.

Benchmark copper on the London Metal Exchange (LME) was up 0.4% at $6,324 a tonne at 1116 GMT.

It was up 5% this week after Thursday's rise to $6,360, the highest since May 2019 and up from a low of $4,371 in March.

"Chinese demand seems to be coming back not just quickly but quicker than most people expected," said Capital Economics analyst Kieran Clancy. "There's also starting to be a supply risk priced into the copper price.

"In some countries, particularly in Latin America, which produces half the world's copper ore, restrictions are being lifted at a time when infections are rising," he said.

CHINA: New bank lending in China, the biggest metals consumer, rose 22.3% to 1.81 trillion yuan ($258.29 billion) in June.

POSITIONING: Speculators' net long in LME copper rose to 12.4% of active contracts by Wednesday, brokers Marex Spectron said.

ShFE STOCKS: Copper stocks in Shanghai Futures Exchange warehouses increased by 20,018 tonnes to 137,336 tonnes in the week to Friday, but remain far below their peak in March.

LME STOCKS: On-warrant stocks in LME-registered warehouses fell by 6,200 tonnes to 88,600, the lowest since Jan. 16.

SPREAD: Cash copper has flipped to a premium against three-month metal on the LME, suggesting tighter nearby supply.

OFF-WARRANT: The LME published off-warrant stocks for the first time, saying there were 1,004,227 tonnes of aluminium and 161,374 tonnes of copper in warehouses registered to issue warrants.

ALUMINIUM: The premium for aluminium shipments to Japanese buyers for July to September was set at $79 a tonne, down 3.7% from the previous quarter, sources said.

OTHER METALS: LME aluminium was up 0.3% at $1,669.50 a tonne, zinc rose 0.3% to $2,161.50, nickel fell 1% to $13,120, lead gained 0.6% to $1,849 and tin was down 2.5% at $16,905.

All were up this week.