Industrial metals cement gains with hopes of strong demand in 2021
- Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $7,830 a tonne.
- Other base metals were up between 0.3% and 1.4%.
LONDON: Copper hovered near its highest since 2013 on Thursday and other industrial metals prices rose as investors bet on strong demand next year and stock markets in Europe rallied in anticipation of a trade deal between Britain and the European Union.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $7,830 a tonne by 1035 GMT but close to last week's peak of $8,028, the highest since 2013.
Other base metals were up between 0.3% and 1.4%.
Metals have rallied this year thanks to strong Chinese demand, government stimulus to reduce the impact of the coronavirus pandemic and a wave of speculative buying.
Copper, aluminium, zinc, nickel and tin are up between 12% and 27% in 2020 with several near multi-year highs. Lead has lagged, up only around 3% in 2020.
A bullish mood among investors and optimism about the outlook for metals demand are boosting prices, said Capital Economics analyst Samuel Burman.
"Nevertheless, we think that industrial metals prices will fall next year as we expect slower demand growth in China and the rollout of coronavirus vaccines to allow mine supply to rebound," he said.
MARKETS: European stocks were up, with a stronger pound pushing the dollar lower.
BULL RUN: A squeeze on the supply of global shares and sovereign bonds shows little sign of easing, with companies and central banks competing with investors to buy these securities.
That should help sustain a decade-long bull run in global equities and keep bond yields low.
BREXIT: Britain and the European Union were on the cusp of striking a narrow trade deal.
TRUMP: US President Donald Trump vetoed a bipartisan defense policy bill and raised the prospect of a government shutdown.
CHINA: China, the biggest metals consumer, will cautiously reduce economic stimulus next year, policy sources say.
PRICES: LME aluminium was up 1.3% at $2,032.50 a tonne, zinc rose 1.4% to $2,859, nickel gained 1.1% to $17,060, lead added 0.3% to $1,978.50 and tin was up 0.3% at $20,085.
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