LONDON: Copper prices jumped to their highest in nearly two weeks on Thursday on signs of firmer demand in top metals consumer China and the prospect of interest rate cuts.
Three-month copper on the London Metal Exchange was up 1.6% to $9,238 a metric ton in official open-outcry trading after touching its strongest since Aug. 30 at $9,294.50.
“The market is looking perky. It looks like copper demand is potentially showing signs of recovery in China. I think that’s the main driver for the market strength,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, adding that stocks of both copper and aluminium have been shrinking of late.
Shanghai Futures Exchange copper inventories have slid 36% over the past three months to 215,374 tons, the lowest level since March. The import premium for copper in China has climbed to $65 a ton, compared with a discount of $20 a ton in May.
“We have seen some buying interest from the spot market in China recently,” said Matt Huang, analyst at broker BANDS Financial, adding that demand was supported by purchases made ahead of a long October holiday in China. However, further price increases might dampen demand, Huang added.
The most traded October copper contract on the Shanghai Futures Exchange closed 1.5% up at 73,830 yuan ($10,363.85) a ton. Nickel was the worst performer on the LME, slipping by 0.1% to $16,100 a ton. The market shrugged off news on Wednesday that Russian President Vladimir Putin had said Moscow should consider limiting exports of nickel.
Russia is a major nickel supplier to China and Europe.
LME aluminium climbed 1.7% to $2,409.50 a ton, zinc surged 2.7% to $2,845, lead was up 2% at $2,029 and tin gained 1.2% to $31,300. Aluminium touched its strongest since Sept. 3 and zinc hit its highest since Sept. 2.
Source: Brecorder
