LONDON: Copper prices rose on Wednesday to their highest in nearly two weeks, driven by a healthy demand outlook on the back of improving manufacturing activity in top consumer China though profit-taking pressure across base metals curbed gains.
Benchmark copper on the London Metal Exchange (LME) traded up 0.4% at $9,024 a metric ton as at 1145 GMT. It earlier touched $9,090, its highest since March 21.
“Excited longs (who) jumped into the market in March are withdrawing, but copper still has enough support from fundamentals,” Ole Hansen,“ head of commodity strategy with Saxo Bank said.
Shanghai copper prices earlier rallied to an all-time high of 74,000 yuan per metric ton, the highest in LSEG record since 2003..
Also supporting copper was the Chinese currency that gained strength after robust economic data from China.
“Yuan stabilising could allow buy-the-dip activity to carry on,” Hansen said. Copper traders still prefer to trade long, but are quick to take profit whenever there is a rally, causing range-bound movements in prices, he added.
Copper climbs on China demand, raw material supply concerns
China’s manufacturing activity expanded for the first time in six months in March, an official survey showed.
Copper inventory in warehouses monitored by Shanghai Futures Exchange rose slightly to 291,849 tonnes, its highest in four years.
Outside of China, growth in U.S. factory activity also lent support to the U.S. dollar which held near an over four-month peak on Wednesday.
In precious metals, gold prices extended a record run on Wednesday as tensions in the Middle East and U.S. interest rate cut hopes continued to push investors into the safe haven asset.
For other metals, LME aluminium fell 0.5% to $2,368 per ton, nickel shed 0.3% to $16,985, zinc declined 0.3% to $2,472.50, lead rose 0.5% to $2,030, and tin dipped 0.1% to $27,880.
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