Copper rallied to its highest in more than a week on Thursday, as supply concerns, a tumbling US dollar, and signs that economic growth has taken deeper root in the United States all contributed to its gains. Many investors looked past data showing a large drop in Chinese imports of the metal last month.
Benchmark copper on the London Metal Exchange finished at $9,700 a tonne versus $9,577 at Wednesday's close. The red metal, used in power and construction, earlier hit $9,707.75 a tonne, its highest since April 12, recovering from one-month lows near $9,200 at the start of the week. In New York, COMEX Benchmark May copper futures settled 6.05 cents higher at $4.40 per lb, a 1.39 percent gain. Earlier, it shot to its highest since April 13 at $4.4030.
"We're seeing reduced risk aversion and that's certainly lifted (US) stocks and also various commodities, including copper," said Peter Buchanan, commodities analyst and senior economist at CIBC in Toronto. Stronger US quarterly corporate earnings have turned investor sentiment in favour of assuming more risk and has contributed to the notion that economic growth is improving. "Certainly the (US) earnings numbers have lent support to the view that the economy is on a recovery track in spite of earlier misgivings, and that's certainly helpful for copper," Buchanan added.