Copper gains on bets that Biden can push through stimulus
- Three-month copper on the London Metal Exchange (LME) was up 0.9% at $8,026 a tonne.
- Yellen did not state anything new, however it (stimulus) was priced in to the market for a second time.
LONDON: Copper pushed higher on Wednesday on renewed optimism over the prospect of another tranche of stimulus spending in the United States, helping to boost economic recovery and metals demand.
Three-month copper on the London Metal Exchange (LME) was up 0.9% at $8,026 a tonne by 1150 GMT.
Joe Biden, who will be sworn in as US president on Wednesday, has proposed a $1.9 trillion stimulus package and his treasury secretary nominee, Janet Yellen, on Tuesday urged lawmakers to "act big" on the next coronavirus relief package.
"Yellen did not state anything new, however it (stimulus) was priced in to the market for a second time. Coupled with expectations for further far-reaching stimulus measures by the new administration, this has lifted metals prices," said Daniel Briesemann, a Commerzbank analyst in Frankfurt.
"We're a little bit cautious because the rally has run hot from several perspectives, but as long as the euphoric sentiment in markets prevails, copper and other base metals prices will remain supported and should defend their high price levels."
Biden's stimulus plans have also boosted share markets, but investors are wondering if it can continue.
The dollar was under pressure partly because of the renewed focus on US pandemic relief spending.
China's refined copper production in December surged 10.9% year on year to a monthly record of 986,000 tonnes, National Bureau of Statistics data showed.
LME cash copper's discount to the three-month contract fell to $2.75 a tonne, its weakest since October last year, indicating increasly tight LME inventories.
LME stocks have tumbled by 40% over the past two months to 93,950 tonnes.
Global primary aluminium output rose 4.22% year on year in December to 5.67 million tonnes, data from the International Aluminium Institute (IAI) showed.
LME aluminium gained 0.5% to $1,974 a tonne, zinc rose 0.9% to $2,709.50 and lead was up 0.7% at $2,030 a tonne while nickel fell by 0.4% to $18,135.
Tin advanced 0.6% to $21,290 after touching its highest since April 2019 at $21,425.
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