LONDON: Copper prices rebounded on Tuesday on supply worries and a weaker dollar, shrugging off an upsurge in COVID-19 cases in the world’s top metals consumer China.
Benchmark copper on the London Metal Exchange had gained 2.6% to $8,122.50 a tonne by 1700 GMT after retreating 2.2% on Monday.
US Comex copper futures climbed 2.6% to $3.70 a lb.
Copper prices got a boost after Chile’s Codelco, the world’s biggest copper miner, proposed a 33.3% increased premium for 2023 supplies to Chinese customers, sources told Reuters.
Surging premiums come against a backdrop of low inventories and mining disruptions.
Codelco’s Chuquicamata smelter is due to undergo major maintenance this month and the company told Reuters it would last longer than expected at 135 days instead of 90 days.
“Being one of the largest open-pit mines in the world and also one of the largest producers of refined copper, being offline for such a substantial period is something to watch for,” broker Marex said in a note.
A slide in the dollar index also helped industrial metals gain, making greenback-priced metals cheaper to holders of other currencies.
Copper shot up 7.1% on Friday, its biggest one-day gain since January 2009, on tight supplies and hopes that China would ease its strict COVID-19 curbs, which could boost metals demand.
New coronavirus cases jumped in global manufacturing hub Guangzhou, data showed on Tuesday, testing the city’s ability to avoid a Shanghai-style lockdown.
“The market is trying to find a floor after the big rally on Friday,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The market tested its first support around $7,880 on Tuesday morning and it held, giving confidence to bullish investors, he added. “That’s attracting some fresh appetite and technical buying.”
Copper inventories are also tight, with stocks on the LME dropping to their lowest in more than seven months on Tuesday, having slid 43% over the past month.
In China, stockpiles in SHFE and bonded warehouses combined were at 84,164 tonnes, not far from their record low of 72,159 tonnes hit in October.
In other metals, LME aluminium advanced 1.7% to $2,377 a tonne, zinc gained 1.6% to $2,932, nickel climbed 2.4% to $23,965, tin jumped 4.5% to $19,795 and lead edged up 0.4% at $2,045.50.
Comments
Comments are closed for this article.