Bullish sentiment propels copper to six-week high

LONDON: Copper gained on Thursday as banks raised their bets on consumption of the metal this year and focused on its longer- term role in the transition to a lower-carbon economy.

Benchmark three-month copper on the London Metal Exchange (LME) was up 1.2% at $9,180.5 a tonne in official trading, after touching a six-week high of $9,211.

"The trigger for that seems to be very positive outlooks from some of the investment banks (such as Goldman Sachs in the case of copper), which are coming out with higher and higher price targets," said Julius Baer analyst Carsten Menke.

Copper is used in electric cabling, construction and, increasingly, in electric vehicles and wind turbines. This has triggered a wave of bets for soaring demand and elevated prices.

The metal is also used as a gauge of global economic health.

FORECASTS: Goldman Sachs said copper could reach $15,000 a tonne by 2025. It also raised its 12-month target to $11,000 per tonne and projected an average of $9,675 in 2021.

"(Higher prices) should stimulate a wave of so-far absent mine supply investment, but if that does not start to materialise or demand surprises to the upside then an even higher price path is probable," the bank said.

Citi said on Monday copper consumption could "materially overshoot our base forecasts in 2021", as it recommended clients take bullish copper exposure over the next few weeks.

DEMAND: Copper imports into top consumer China in March rose 25% from a year earlier, customs data showed.

STOCKS: Inventories in LME-registered warehouses fell by 2,550 tonnes to 169,475 tonnes, but have more than doubled since February.

NICKEL: The Philippines, the top supplier of nickel ore to China and a major producer of copper and gold, lifted a moratorium on new mineral agreements imposed in 2012.

ALUMINIUM: Aluminium was up 0.8% to $2,344 per tonne after hitting its highest level since May 2018 at $2,356,50 on supply concerns in China and after US sanctions on Russia, a major producer.

OTHER PRICES: Zinc gained 0.4% to $2,833 a tonne, lead added 0.5% to $2,006.50, tin was steady at $26,231, while nickel lost 1.7% to 16,105.