LONDON: Copper prices rose on Thursday towards 10-year highs hit last month as a bumper US stimulus bill, benign US inflation data and better than expected Chinese lending numbers spread a bullish mood through markets.
With Chinese equities up around 2.5%, the US Dow Jones Index at record levels and European stocks reaching a one-year high, benchmark copper on the London Metal Exchange (LME) was up 2.1% at $9,048 a tonne in official trading.
Copper, used in power and construction, reached $9,617 a tonne in February as analysts warned that demand from China, green energy and electrification will outstrip supply.
But those demand expectations may be too rosy, particularly as China reins in spending on infrastructure and demographic change begins to reduce the proportion of its people in work, said Julius Baer analyst Carsten Menke.
He predicted that prices would trade between $8,000 and $10,000.
CHINA: Boosting confidence in Chinese demand was official data showing that new bank lending in China fell less than expected in February.
AUTOS: Chinese auto sales also surged 365% year-on-year in February for their 11th month of gains.
OUTPUT: Large Chinese copper smelters raised their cathode output by 3.3% in February from January, researchers Antaike said.
STIMULUS: The US House of Representatives gave final approval on Wednesday to one of the largest economic stimulus measures in American history.
ECB: The European Central Bank is likely to signal faster money printing on Thursday to keep a lid on borrowing costs.
LEAD: Lead inventories in LME-registered warehouses rose 22% to 115,700 tonnes and the proportion already earmarked for delivery fell sharply. Benchmark prices were up 0.7% at $1,960.50 a tonne.
TIN: LME tin was 3.9% higher at $26,100 as the premium for cash metal versus the three-month contract continued to soar, pointing to an acute shortage of quickly deliverable material.
OTHER METALS: LME aluminium was up 0.6% at $2,181.50 a tonne, zinc rose 1.7% to $2,810 and nickel gained 2.6% to $16,467.