London copper jumped to a more than six-month high on Monday, while most other base metals also rose as demand prospects brightened after top consumer China reopened its borders.
Three-month copper on the London Metal Exchange was up 1.1% at $8,686 a tonne, as of 0639 GMT, after hitting its highest since June 23, 2022 at $8,711 earlier in the session.
The most-traded March copper contract on the Shanghai Futures Exchange advanced 1.5% to 66,100 yuan ($9,750.99) a tonne.
The contract leapt 1.8% earlier in the session to its highest since Dec. 30 at 66,260 yuan a tonne. After three years, mainland China opened sea and land crossings with Hong Kong and ended a requirement for incoming travellers to quarantine, dismantling a final pillar of a zero-COVID policy.
“The events of last weekend have seemingly changed many people’s views on the global economy… This in turn has led to talk of green shoots of recovery, full steam ahead for the Chinese, and thus the global economy,” Malcolm Freeman, a director at broker Kingdom Futures, said in a note.
The US dollar eased on China’s reopening of its borders and rising hopes that the US Federal Reserve would slow the pace of its interest rate hikes following the December jobs report.
A weaker dollar makes greenback-priced metals cheaper to holders of other currencies. Economists and analysts also believe policymakers in China will take more steps to stimulate home demand this year after a COVID-induced downturn.
Metals are used extensively in housing construction. LME zinc increased 2.3% to $3,094 a tonne, lead rose 2% to $2,245.50 a tonne, aluminium advanced 1.7% to $2,334.50 a tonne and tin was up 1.1% at $25,550 a tonne.
Copper hits 3-week high on China hopes
SHFE aluminium advanced 0.6% to 17,980 yuan a tonne, zinc increased 1.4% to 23,575 yuan a tonne, nickel fell 0.4% to 211,800 yuan a tonne and lead fell 0.6% to 15,570 yuan a tonne.
However, Freeman was cautious of the bullishness in metals prices, as the state of Chinese, US and European economies is not improving fast.