Copper strides to highest peaks since 2013 on U.S. stimulus plans

LONDON: Copper prices pushed to the strongest levels since March 2013 on Friday as U.S. politicians moved closer to agree on long-awaited stimulus spending that would boost the economy.

Copper has regularly hit new multi-year highs and shares touched record levels over the past week, boosted by news about the roll-out of COVID-19 vaccines and robust data about China's economic recovery.

A bipartisan, $908 billion coronavirus aid plan gained momentum in the U.S. Congress on Thursday as conservative lawmakers expressed their support.

"The U.S. stimulus news has definitely helped risk appetite, which has been strong ever since the good news about vaccines," said Samuel Burman, assistant commodities economist at Capital Economics.

"We think industrial metals prices will hold steady for the next couple of months, supported by this investor risk appetite and also by the strong economic activity out of China."

Once stimulus starts to be withdrawn in China, however, prices are likely to pull back next year, Burman added.

Three month copper on the London Metal Exchange had gained 1.1pc to $7,759 a tonne by 1100 GMT after touching $7,774, its highest since March 2013.

Copper, often used as a gauge of global economic health, was poised for a fifth straight weekly gain with a rise of 3.4pc.

However, with London copper already leaping 78pc since March lows and Shanghai prices rallying 65pc in the same period, the contracts may soon run out of steam, analysts said.

"The rally in copper prices is likely to cool in the coming weeks, as speculative sentiment is extremely bullish, limiting further upside," a Fitch Solutions report said.

Also supporting metals was a weak dollar index, which touched a 2-1/2 year low, making commodities priced in the U.S. currency cheaper for buyers using other currencies.

LME aluminium gained 0.8pc to $2,045 a tonne, zinc rose 0.8pc to $2,778, nickel added 0.9pc to $16,095, lead advanced 0.8pc to $2,048 and tin edged up 0.3pc to $18,950.