LONDON: Copper prices hit their highest in more than a month on Tuesday, lifted by firm demand in top consumer China and sharp declines in inventories. Benchmark three-month copper on the London Metal Exchange gained 1.5 percent to USD13,826.50 a metric ton by 1405 GMT, its strongest level since June 15.
“Copper is being pulled higher by a tightening Chinese market. Stocks are falling, import premiums are surging and physical demand has remained stronger than expected despite the seasonal slowdown,” said ING commodities strategist Ewa Manthey.
The most-traded copper contract on the Shanghai Futures Exchange gained 1.6 percent to 105,460 yuan (USD15,589.29) a ton.
The premium paid over SHFE prices to buy copper in the spot market jumped to 435 yuan a ton, up from zero last week and the highest since May last year.
Copper stocks in SHFE-monitored warehouses have tumbled by 82 percent since early May while copper in LME-registered warehouses has slid by 28 percent in the same period, with much of the LME material moving to the United States.
US Comex copper futures outperformed the LME, gaining 2.7 percent to USD6.52 per lb for its highest since June 17, bringing the Comex premium over LME copper to USD529 a ton.
“Comex is getting an extra lift from tariff anxiety. The market is increasingly pricing the risk of US import restrictions,” Manthey added.
The US Commerce Department was due to complete a review of the copper market by June 30, but President Donald Trump has not yet announced a decision on tariffs. Industrial metals also gained support from higher risk appetite among investors amid a rebound in global stocks.
LME aluminium gained 0.7 percent to USD3,161 a ton as the market digested lower global primary output in June and an adjustment to tariffs on imports of the metal into the United States. LME zinc rose 0.6 percent to USD3,540 a ton, lead edged up 0.1 percent to USD1,881, nickel was up 0.8 percent at USD17,060 and tin climbed 1.9 percent to USD53,900.
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