LONDON: Copper rose on Thursday on hopes that an easing of coronavirus controls in top consumer China will increase demand, with Goldman Sachs predicting prices could reach a record high of $11,000 in a year.
Benchmark copper on the London Metal Exchange (LME) was up 0.5% at $8,501.50 a tonne at 1122 GMT.
Weakening growth in China and elsewhere dragged prices from a high of $10,845 in March, but the market is now anticipating economic recovery.
Copper is up 3% this month after rising 10.6% in November as expectations began to build that China will retreat from its zero-COVID policies.
On Wednesday, the country dropped key parts of those rules.
Analysts at Goldman Sachs said they now expect copper to be undersupplied in 2023 and “peak supply is now immovably fixed in mid-2024 … generating deficits from that point.”
They said China may seek to rebuild depleted inventories next year, adding to copper demand, and predicted prices would average $9,750 a tonne in 2023 and $12,000 in 2024.
Copper falls as weak China data fuels demand worries
China’s Bank of Communications meanwhile said it had signed pacts to support eight property firms, easing a liquidity crunch in the sector, which is a major user of metals.
Demand remains subdued in the short term, however.
Data showed that China’s passenger vehicle sales fell for the first time in six months in November, Chinese copper import premiums are falling and some fear that relaxed COVID rules will cause a huge increase of infections.
LME aluminium was up 0.1% at $2,487.50 a tonne, zinc rose 0.7% to $3,204, lead gained 0.3% to $2,219.50 and tin was up 0.4% at $24,410.
Nickel was up 0.2% at $31,515 a tonne after earlier leaping to $33,575, its highest since April.
Prices have surged by around 17% this month after rising 24% in November, with traders blaming low liquidity for extreme volatility in the market.
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