LONDON: Copper prices rebounded on Wednesday on strong economic data from top metals consumer China and the United States, shrugging off a surge in inventories.
China’s factory activity extended solid growth in September, underlining a steady economic recovery from the coronavirus shock, while US data showed private employers stepped up hiring in September by more than forecast.
Copper fluctuated between modest losses and gains in early trade but climbed after the US payrolls data was released.
“The data overnight shows China is clearly improving, but at the same time so has the data in terms of available copper stocks over the past few days,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“The fact we’ve broken the uptrend that has been in place since March means we can at the minimum expect some sideways trading, with the potential risk of running into some additional profit-taking from the longs.”
Three-month copper on the London Metal Exchange (LME) had gained 1.6% to $6,686 a tonne by 1600 GMT, having earlier slipped as low as $6,563.
Chinese markets will be closed Oct. 1-8 for the Golden Week holiday.
Also supporting prices was a turnaround in the dollar index, which had been firmer but slipped in later trading, making greenback-priced metals less expensive to buyers using other currencies.
LME copper stocks surged by nearly 30,000 tonnes to 165,600, data showed on Wednesday, and have more than doubled over the past week.
Nickel smelting park PT Indonesia Weda Bay Industrial Park expects next year to double its current capacity of 110,000 tonnes of nickel content per year.
LME aluminium fell 0.8% to $1,769.50 a tonne and zinc dropped 0.8% to $2,405.
Lead shed 1.1% to $1,825 after touching a two-month low of $1,814, nickel rose 0.6% to $14,545 and tin added 0.1% to $17,480.—Reuters
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