LONDON: Copper prices touched a seven-week high on Friday on support from tightening inventories and a weaker dollar, before easing back as investors took the opportunity to lock in profits after the metal’s 3.3% weekly gain.
Benchmark copper on the London Metal Exchange (LME) was up 0.4% at $9,093 a tonne at 1050 GMT after reaching $9,141.50, the highest since February 23.
Prices for copper used in electrical wiring hit a seven-month high of $9,550.50 in January on hopes that Chinese demand would rebound after the country abandoned COVID-19 curbs but retreated when consumption failed to pick up quickly.
“Copper broke its downtrend from the January high yesterday, supported by the weaker dollar, dwindling exchange-monitored stocks and robust data out of China,” said Saxo Bank strategist Ole Hansen.
The metal rose by 1.6% on Thursday as March trade data from top metals consumer China showed an unexpected surge.
Copper hits two-week high on strong Chinese data
Copper inventories in warehouses monitored by the Shanghai Futures Exchange are down 4.0% this week. Copper stocks in LME-registered warehouses hit their lowest since 2005 on Friday.
The dollar headed for its longest stretch of weekly losses in almost three years on Friday, making metals moreattractive to buyers holding other currencies.
Some analysts, however, suggested that copper would not find enough support, either from reduced supply or increased demand, to rally further.
“While prices could still trade above $9,000 next week, fundamentals suggest a limited upside,” said Soni Kumari, commodity strategist at ANZ Research.
China’s spot demand looks subdued and signals for supply are improving as production in Chile recovers and amid strong refined copper production in China, Kumari added.
Chile, the world’s top copper producer, said on Thursday its output would pick up in coming years after last year’s fall.
Among other metals, LME lead hit its highest since Jan. 30 at $2,179.5 and nickel touched its highest since March 3 at $24,785.
Aluminium gained 1% to $2,391 a tonne, zinc climbed 1.8% to $2,889, nickel added 3.6% to $24,550, tin advanced 1.9% to $24,900 and lead rose 1.1% to $2,170.