LONDON: Copper prices soared on Wednesday to near seven-year highs as hopes for vaccines to combat the coronavirus and expectations of strong demand from top consumer China triggered buying.
Benchmark copper on the London Metal Exchange was up 0.1% at $7,299 a tonne at 1701 GMT.
Prices of the metal used widely in the power and construction industries earlier touched $7,360 a tonne, the highest since January 2014 and a gain of 70% since March.
“The vaccine has given everything a lift, China has announced many new construction projects,” said SP Angel analyst John Meyer.
“The election of Joe Biden (for US President) is likely to mean more US stimulus for longer and people are starting to get excited about infrastructure projects.”
The latest report from AstraZeneca said on Monday its Covid-19 vaccine could be up to 90% effective, giving the world’s fight against the global pandemic a third new weapon that could be cheaper to make, easier to distribute and faster to scale up than rivals.
China’s construction plans include four fixed-asset investment projects worth a combined 10.6 billion yuan ($1.6 billion) approved in October.
There were reports that Biden planned to nominate former Federal Reserve Chair Janet Yellen as Treasury Secretary, potentially easing the passage of a fiscal stimulus package cheered markets.
Weak US jobless data, reinforcing expectations of stimulus to shore up the US economy, helped buoy copper prices.
Copper has drawn support from a fall in stocks in LME registered warehouses, which are down more than 15% since mid-October.
Stocks in warehouses monitored by the Shanghai Futures Exchange have nearly halved since September.
However, the slide in exchange stocks is partly offset by rising stocks in bonded warehouses in Shanghai.
Support for industrial metals came from a lower US currency, making dollar-denominated commodities cheaper for holders of other currencies.
Aluminium was down 0.9% at $1,969 a tonne, zinc slipped 0.3% to $2,744.5, lead rose 0.3% to $2,029, tin added 0.3% to $18,745 and nickel ceded 1.2% to $16,050.—Reuters