LONDON: Copper hit its highest in more than two years on Monday on news of progress on a coronavirus vaccine and investor optimism over global trade after Joe Biden's US election victory. Metals were also boosted by hopes of containing the COVID-19 pandemic and resulting economic stress after Pfizer Inc said its experimental vaccine was more than 90% effective based on initial data from a large study.
US stock markets hit record highs.
"There is definitely euphoria in the market at the moment after the news of the vaccine. This will drive cyclical commodities like copper even further," said Commerzbank analyst Daniel Briesemann.
"But there is still a long way to go until the vaccine is delivered. I think markets will calm down again. It will take a long time before we all profit from a vaccine."
Investors were also buying trade-exposed currencies on expectations that a calmer White House would bring better diplomacy and less trade angst. The US dollar sagged, meanwhile, making dollar-priced metals more attractive to holders of other currencies.
Three-month copper on the London Metal Exchange (LME) touched $7,054 a tonne, its highest since June 2018, before falling back to $6,949 by 1730 GMT, up 0.1% for the day.
"Copper is benefiting from a very strong risk-on rally driven by a weaker dollar after the election last week," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Chinese exports grew at the fastest pace in 19 months in October, while imports also rose, as the world's top copper consumer continued to recover from its coronavirus-driven slump early this year. China accounts for nearly half of global copper consumption estimated at about 24 million tonnes.
Chilean state-owned miner Codelco agreed a contract with a major Chinese buyer for 20,000-30,000 tonnes of annual copper supply at a premium of $88 a tonne in 2021, sources said.
Aluminium gained 0.1% to $1,902.50 a tonne, zinc rose 0.7% to $2,652, nickel jumped 2.7% to $15,847, lead fell 0.3% to $1,836.50 and tin was down 0.1% at 18,340.
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