Copper edges up as tech rebound, lower oil lift risk appetite
- Benchmark three-month copper on the London Metal Exchange was up 0.31% at $13,939 a metric ton
Copper gained as easing oil prices and a tech stock rebound boosted market sentiment, while tight supply and record premiums in China provided strong underlying support.
- China's record copper premiums and import shortfalls
- Market sentiment boosted by easing oil prices and tech rebound
- Tight global supply indicated by backwardation and low stocks
SINGAPORE: Copper gained on Tuesday, lifted by easing oil prices and a tech-stock rebound, while supply tightness in China provided further support.
Benchmark three-month copper on the London Metal Exchange was up 0.31% at $13,939 a metric ton by 0300 GMT.
The most-traded copper contract on the Shanghai Futures Exchange edged 0.14% higher to 107,700 yuan ($16,140) a ton.
Buyers in biggest consumer China are facing record premiums, amid shortfalls in copper concentrate and refined copper stocks.
China’s October copper concentrate imports fell 11% compared to last year, customs data showed on Tuesday, as smelters were squeezed by deep negative treatment charges and falling sulfuric acid prices.
Copper stocks in SHFE-monitored warehouses were at only 33,848 tons on Friday and the Yangshan premium, a gauge of China’s appetite for imported copper, rose to a new record of $230 a ton on Monday.
Wall Street and an index of global stocks rallied broadly on Monday, as investors reassessed the post-midterm election tech selloff.
The technology stock rebound and tight nearby spreads “took shorts by surprise,” said Sandeep Daga, head of research at Metal Intelligence Centre.
LME copper’s cash-to-three-month spread last traded at $175.39 a ton backwardation, signaling tight nearby availability.
Hopes of de-escalation in the Middle East conflict have pushed oil prices lower, improving risk appetite across markets and lifting copper, Daniel Hynes, senior commodity strategist at ANZ, said in a note.
US President Donald Trump has struck a more conciliatory tone around Iran since the Republican Party’s drubbing in the midterms.
Trump acknowledged that the war with Iran contributed to the defeat.
The Middle East conflict dampened prices for growth-dependent metals like copper by weighing on the global economic outlook.
Among LME metals, aluminium dipped 0.31%, zinc gained 0.51%, lead added 0.13%, nickel climbed 0.18% and tin ticked 0.1% higher.
On the SHFE, aluminium lost 1.06%, zinc dipped 0.18%, lead lost 0.4%, nickel nudged up 0.14% and tin ticked 0.11% higher.