LONDON: Copper hit a one-month high on Tuesday due to a weaker dollar, optimism over a $1.9 trillion stimulus package and tight supplies of the metal.
Three-month copper on the London Metal Exchange (LME) added 1.6% to trade at $8,163 per tonne by 1700 GMT. This was its highest since Jan. 8 when it hit its strongest level since 2013 at $8,238.
“Its a macro-driven story for copper at the moment. Market participants are euphoric and equities are at record highs, pushing commodities up,” said Daniel Briesemann, an analyst at Commerzbank, adding that the weaker dollar was “another tailwind for copper”.
Total copper stocks in LME-registered warehouses climbed 1,475 tonnes to 76,050 tonnes but are still hovering near their lowest since Dec. 2005.
Cancelled inventory - stock earmarked for delivery - was high at 28% and fuelled concerns over a tight LME market.
The premium for cash copper over the three-month LME contract, at about $13, is at its tightest since September.
Inventories of copper on Comex and the Shanghai Futures Exchange (ShFE) are also near their lowest in years.
Speculators have trimmed their net long positions in copper futures from recent highs. Aluminium rose 1.5% to $2,058 per tonne, zinc added 1.6% to $2,694, lead gained 0.3% to $2,079, tin rose 0.4% to $23,165 while nickel climbed 1.2% to $18,380.