LONDON: Copper powered to a 29-month peak on Monday after higher than expected factory output in China reinforced views of solid demand from the world's top consumer of industrial metals. Three-month copper on the London Metal Exchange (LME) was up 1.8% at $7,106 a tonne at 1730 GMT, having touched its highest since June 2018 at $7,179.
Helped by resilient exports, China's industrial sector has rebounded from the initial hit it took from the coronavirus outbreak, creating robust demand for metals such as copper.
"The strong macro China data is giving copper another ride higher and reinforces the view that China's demand recovery is holding its shape," said ING analyst Wenyu Yao.
Prices have also been supported by progress with Covid-19 vaccines after Moderna Inc said its experimental vaccine was 94.5% effective, a week after Pfizer Inc reported that its drug was more than 90% effective.
The Dow index of US shares hit a record high. Benchmark LME aluminium was up 0.9% at $1,950 a tonne after hitting its highest since December 2018. Shanghai aluminium climbed to a three-year peak at 15,585 yuan a tonne.
"Consumption in China is holding firm and outweighing the concerns of rising supply," ING's Yao said.
China's monthly aluminium output in October rose 9.7% from a year earlier to a record high, official data showed on Monday, as new smelting capacity ramped up to cash in on strong prices.
Copper supply concerns eased after Chile's Spence mine, owned by BHP Group, on Saturday said that it had struck an early deal with its union of supervisors on a contract that will run until November 2023.
However, workers at the Candelaria copper mine in Chile, operated by Lundin Mining Corp, are divided over whether to accept a contract sweetener or continue a strike. LME tin was up 2.2% at $18,795 a tonne after touching its highest since July 2019 at $18,850. Zinc, meanwhile, gained 1.7% to $2,674, lead rose 1.1% to $1,914 and nickel was up 0.1% at $15,900.
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