Copper rises as Fed spreads bullish mood through markets
- Benchmark copper on the London Metal Exchange (LME) was up 1.3pc at $9,816 a tonne at 1603 GMT, near a record high of $10,747.50 reached in May.
LONDON: Copper prices rose on Thursday after signals from the U.S. Federal Reserve that it was in no rush to tighten and efforts by China to calm fears of new regulation spread a bullish mood through markets.
Global equities rose, with strong company earnings pushing U.S. indexes to all-time highs, while China's yuan strengthened and the dollar fell to a one-month low, helping dollar-priced metals by making them cheaper for buyers outside the United States.
Also lifting copper were the threat of a strike at a major mine in Chile and progress of a $1 trillion infrastructure investment bill in the U.S. Senate.
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Benchmark copper on the London Metal Exchange (LME) was up 1.3pc at $9,816 a tonne at 1603 GMT, near a record high of $10,747.50 reached in May.
Many analysts expect demand for copper for power and construction to outstrip supply in the coming years, but with prices up 60pc from the start of 2020, a move lower is likely later in the year, said Commerzbank's Daniel Briesemann.
"I'm convinced we will see higher or even much higher prices in the next few years, but it should not be a one way street and we need some healthy corrections," he said.
FED: Jerome Powell said the Fed was "some ways away" from substantial progress on jobs that is needed to start tapering.
CHINA: China stepped up attempts to calm investor nerves after a market rout this week by telling foreign brokerages not to "overinterpret" its latest regulatory actions.
Copper gains for fourth session on economic recovery hopes
STRIKE: The union of workers at BHP's Escondida copper mine in Chile, the world's largest, called upon its members to vote to strike.
STIMULUS: A roughly $1 trillion infrastructure bill passed a key milestone that moves the legislation toward formal debate and possible passage.
GROWTH: The U.S. economy grew solidly in the second quarter, pulling its GDP above its pre-pandemic peak.
CHINA SALES: China released 170,000 tonnes of copper, aluminium and zinc from its state reserves as part of efforts to keep a lid on prices.
OTHER METALS: Aluminium was up 2pc at $2,588.50 a tonne, zinc rose 1pc to $3,008, lead added 1.2pc to $2,371.50, tin gained 1.2pc to $34,825 and nickel was 1.6pc higher at $19,860.
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