LONDON: Base metals prices rose in London on Thursday, supported by unexpected growth in factory activity in top metals consumer China and a vote of approval from the U.S. House of Representatives to suspend the debt ceiling.
Benchmark copper on the London Metal Exchange (LME) rose 2.1% to $8,260.5 a tonne by 1023 GMT. The metal used in power and construction fell by 5.9% in May.
ING expects copper prices to remain volatile in the coming days, reacting to any policy change in China, and to average $8,500 per tonne in 2023.
“In the near term, copper prices are likely to continue to be dictated by the pace of China’s economic recovery as well as the (U.S.) Fed’s interest rate hiking path,” ING analyst Ewa Manthey said.
Driven by improved production and demand in China, the Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 50.9 in May, marking a return to growth, compared with a contraction in activity seen in the official PMI released on Wednesday.
Copper prices rise on softer dollar and easing US debt worries
In the zinc market, LME on-warrant stocks fell to 78,650 tonnes after cancellation of warrants to take delivery of 3,175 tonnes from LME-registered warehouses in Singapore.
The total LME inventories of zinc are at a one-year peak following growth since May 23, indicating surpluses of the metal used to galvanise steel.
Confidence on the LME market about the availability of the metal for speedy delivery pushed the discount for the cash contract over the three-month zinc contract to $18.75 a tonne as of the market close on Wednesday, its deepest since mid-March, 2022.
LME zinc gained 2.4% to $2,302, aluminium rose 1.2% to $2,272 a tonne, nickel edged up 1.9% to $20,980 and tin climbed 0.8% to $25,650.
Lead fell by 0.8% to $1,996, after touching $1,985, its lowest in almost seven months.
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