Copper rises as Chinese demand expectations add to speculative momentum

LONDON: Copper prices rose for a fifth consecutive session on Monday, edging closer to record highs, as expectations of a seasonal pickup in demand in the world’s biggest consumer China sustained speculative buying.

Benchmark three-month copper on the London Metal Exchange was up 1.4percent at USD14,725 a metric ton in official open-outcry trading, after earlier touching USD14,762.5, its highest level since September 10, when it hit a peak of USD14,875.

Renewed speculative demand has pushed copper higher after funds cut their net long positions in Comex copper futures in the week to September 15, as the White House has yet to decide on refined copper tariffs, said Ole Hansen, Saxo Bank’s head of commodity strategy. The premium of US copper futures over LME prices widened, climbing back towards levels encouraging new physical shipments to COMEX copper stocks, which store 69percent of 1-million-ton exchange-monitored copper inventories.

Expectations for inventory replenishment in China ahead of the country’s holidays on September 25 and from October 1 to 7 provided support for copper prices, while traders await this week’s meeting between US President Donald Trump and Chinese leader Xi Jinping. Yangshan copper, a gauge of Chinese demand for imported copper, finished last week at USD124 a ton, its highest in nearly four years, although it eased to USD119 on Monday.

Available copper stocks in LME-registered warehouses fell to 133,725 tons, daily LME data showed, after 9,600 tons of fresh cancellations in Asia. This helped to widen the premium of the LME cash copper contract over the benchmark to USD47 a ton from a discount of USD86 on September 14.

Among LME metals, aluminium fell 0.5percent to USD3,272.5 in official activity, while zinc was up 0.3percent at USD3,930, tin gained 0.6percent to USD54,040 and nickel added 0.5percent to USD16,260. Lead was up 0.3percent at USD1,927 after hitting a three-month high of USD1,929.5.