Copper hits multi-year peak as companies and speculators buy

LONDON: Copper stormed to its highest in 7-1/2 years on Friday as speculators joined industrial users in buying metal as they geared up for a recovering economy boosted by COVID-19 vaccines.

Three-month copper on the London Metal Exchange (LME)gained 1pc to $7,476.50 a tonne in official trading after hitting its highest since May 2013 at $7,511.

"There's restocking taking place by manufacturing companies, whose stocks were very low and now need metal after the positive news about vaccines," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.

Speculators were also continuing to pile in after LME copper broke above the key technical level of $7,300, which opens up a trajectory to the next target of $8,000, he added.

"The technical roadmap is clear and bullish, but in the short term there's room for consolidation. After the China data on Monday we may have a last burst higher and then there's space for consolidation lower."

Chinese data on Monday is expected to show the country's manufacturing expanded at a slightly faster pace in November, according to economists polled by Reuters.

LME copper, up 2.7pc over the week, has rallied 71pc since March on a strong rebound in demand from top consumer China and falling inventories.

Combined copper stockpiles in LME, ShFE, COMEX and Chinese bonded warehouses fell to 692,279 tonnes, their lowest since Oct. 12, driven by a drop in ShFE inventories that hit a six-year low of 92,912 tonnes, Refinitiv Eikon data showed.

Cash LME lead's discount to the three-month contract has dropped to $10.85 a tonne, its weakest in about a month and about half last week's level.

LME lead and nickel both touched one-year highs, with lead gaining 1.3pc in official activity to $2,061 a tonne and nickel rising 0.9pc to $16,414.

Aluminium was up 0.6pc at $1,988.50, zinc added 0.6pc to $2,776.50 and tin advanced 1.5pc to $19,090.