Copper hits over 2-year high on Chinese demand recovery

SINGAPORE: London copper gained more ground on Monday, climbing to its highest in more than two years, as a recovery in China's industrial production underpinned prices.

Three-month copper on the London Metal Exchange rose 0.3pc to $6,832.50 a tonne by 0735 GMT, after climbing earlier in the session to its highest since June 2018 at $6,877.50 a tonne.

"Copper hit a two-year high as a weaker US dollar and positive economic outlook boosted sentiment," ANZ said in a note.

"The market had been buoyed (last week) by data showing China's strong recovery from the virus-induced slowdown earlier this year."

Meanwhile, Asian shares slipped on fears the global economy may sputter for a while due to a resurgence of coronavirus infections in Europe, while fading hopes for US fiscal stimulus also weighed.

The most-traded copper contract on the Shanghai Futures Exchange finished up 0.3pc at 52,160 yuan ($7,710.39) a tonne.

China's industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year, suggesting the economic recovery is gathering pace as demand improves more broadly from the virus crisis.

The global economy appears to be recovering from the coronavirus slump faster than thought only a few months ago, thanks to improving outlooks for China and the United States, the OECD said last week.

Physical copper premiums in China continued to fall, losing $4.50 on Friday to $59 a tonne, data showed, extending a decline from highs of $100 six weeks ago. That is the lowest level since the start of April.