LONDON: Copper prices touched their highest in nearly two months on Friday and aluminium also climbed on worries over an energy crisis hitting output while supply is tight and inventories low.
Three-month copper on the London Metal Exchange was up 2.1% at $8,297 a tonne by 1025 GMT, its highest since June 30.
Copper prices have rebounded 17% since touching 20-month lows on July 15, but are still down 25% from a record peak scaled in March.
Soaring power prices have hit energy-intensive aluminium and zinc the most, causing smelter cutbacks, but have boosted costs for metals producers across the board.
The most-traded September copper contract on the Shanghai Futures Exchange ended daytime trading up 1.7% at 63,690 yuan ($9,278.85) after hitting its highest since June 30.
“As long as supply is being destroyed by the energy crisis at a faster rate than demand is being destroyed by hawkish policies of central banks, that could really tighten the fundamentals for base metals,” said Nitesh Shah, commodity strategist at WisdomTree.
LME benchmark aluminium gained 2.9% to a two-week high of $2,505 a tonne.
Uncertain demand prospects undermine copper prices
Weak inventories are also supporting prices, with copper on-warrant stocks - those not earmarked for delivery – hitting the lowest in more than four months this week after sliding 42% so far this month, LME data show.
“If you look at inventories of base metals, they are massively below the five-year average. This is screaming very, very tight supply,” Shah said.
Chinese copper giant Maike Metals International Ltd has been seeking help from the government and financial institutions after liquidity issues forced it to delay some payments for imported copper, Bloomberg News reported.
LME zinc added 1.7% to $3,606.50, lead rose 1.6% to $2,008.50 and nickel advanced 2.3% to $22,175, but tin dipped 0.1% to $24,290.
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