LONDON: Copper prices rose on Monday, buoyed by hopes that the US government shutdown will end soon and by data showing deflation eased in top metals consumer China.
Benchmark three-month copper on the London Metal Exchange gained 0.9 percent to USD10,815 a metric ton in official open-outcry trading. LME copper has advanced 23 percent this year, hitting a record peak of USD11,200 on October 29. Industrial metals joined other financial markets in climbing after the US Senate on Sunday moved forward on a measure aimed at reopening the federal government.
“That’s sending a bit of a cheerful sign and risk-on sentiment through the markets. Industrial metals are feeling the impact of that as well,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
An end to the US government shutdown could also strengthen calls to cut US interest rates after weak economic data, he added. “Would a cut be enough to outweigh the potential risk to growth in the short term? That’s the big question that the industrial metal sector has to confront,” Hansen said.
The most traded copper contract on Shanghai Futures Exchange closed daytime trading up 0.6percent at 86,480 yuan (USD12,140.95) a ton. Also supporting prices was data showing Chinese producer price deflation eased in October and consumer prices returned to positive territory.
“Copper demand from end-users has stayed resilient. Even though buyers were cautious when prices were high, many purchasing orders have picked up again as prices have eased,” analysts at Chinese broker GF Futures said in a note.
LME lead rose 0.7 percent in official activity to a four-month high of USD2,061.50 a ton on buying by speculators after LME inventories slid by 21percent over the past month.
Over the past five years, lead has been seasonally strong in November, suggesting there is more room to go higher, broker Marex said in a note.
Among other metals, LME aluminium advanced 1.2percent to USD2,882.50 a ton, zinc gained 1.5 percent to USD3,101, nickel added 0.3 percent to USD15,105 and tin was up 1percent at USD36,195.
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