Copper hovers near 10-year high as equities take a breather

LONDON: Copper prices on Tuesday hovered just below 10-year highs as rising coronavirus infections pulled global stock markets back from record levels, but strong demand and tight supplies are expected to fuel further gains for the metal.

Benchmark copper on the London Metal Exchange (LME) was up 0.1% at $9,385.50 a tonne at 1210 GMT after touching $9,483, the highest since Feb. 25.

"Demand is picking up as we get the second quarter under way," said Robin Bhar, an independent analyst.

"That is meeting tight supply and therefore we are seeing some exchange stocks being whittled away ... we could easily go to $10,000 and higher as those stocks dwindle," he said.

MARKETS: Global shares slipped further as lofty sovereign bond yields and rising global COVID-19 cases had investors questioning high equity valuations.

DOLLAR: The dollar in early trading fell to its lowest in seven weeks, supporting metals by making them cheaper for non-US buyers, before recovering.

CONCENTRATE: "The treatment charges that refineries demand from mining producers to refine (copper) concentrate have literally collapsed," said analysts at Commerzbank.

"This is a clear sign that refineries are having a hard time securing supply ... the concentrate supply bottlenecks are likely to lend further support to the copper price," they said.

CHINA: After a spike in commodities prices, China's industry ministry said it would take steps to stabilise and more strongly supervise raw material markets.

LEAD/ZINC: The nickel, lead and zinc markets were oversupplied in February, data from the International Nickel Study Group (INSG) and International Lead and Zinc Study Group (ILZSG) showed.

ALUMINIUM: Global primary aluminium output rose to 5.725 million tonnes in March from revised 5.187 million tonnes in February, the International Aluminium Institute (IAI) said.

OTHER METALS: LME aluminium was up 0.1% at $2,331.50 a tonne, zinc was flat at $2,846.50, nickel rose 0.4% to $16,180, lead was down 0.5% at $2,047 and tin was 0.1% higher at $26,740.