SHANGHAI: Shanghai copper prices posted their fifth straight month of gains on Monday, the longest winning streak in 11 years, as the coronavirus-hit Chinese economy rebounded.
Strong construction and infrastructure activities, buoyed by the government's stimulus programmes as well as a recovery in manufacturing have fuelled copper demand in the world's second biggest economy.
Manufacturing activities in China, the world's top consumer of copper, have been expanding every month since March, following a record contraction in February due to the outbreak.
The most-traded October copper contract on the Shanghai Futures Exchange closed up 0.5% at 51,980 yuan ($7,584.22) a tonne. It posted a 0.6% monthly gain in August and marked the longest monthly winning streak since August 2009.
However, August was also the weakest monthly gain since October for ShFE copper, as construction activities slowed in the wet, hot summer months of July and August in China.
"Prices still have the potential to increase, but in the short-term they will be floating around," said analyst He Tianyu of CRU Group, expecting a price rally from mid-September at the earliest, when the traditionally strong copper season kicks in.
The London Metal Exchange was closed for a public holiday on Monday. Its benchmark three-month copper contract ended the month of August on Friday with a 4% gain, also the fifth straight month of increase.
China's factory activity grew at a slower pace in August as floods across southwestern China disrupted production, but the services sector expanded at a solid rate in a boost to the economy as it continues to recover from the coronavirus shock.
ShFE nickel hit its highest since Nov. 15 at 121,550 yuan a tonne and posted a 9.3% gain in August, the strongest since August 2019.
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