Thursday, 12 March 2015 20:51
LONDON: Copper hit its highest price levels in more than a week on Thursday after upbeat lending data out of China calmed fears about metals demand and triggered short-covering while a dip in the dollar also offered support.
Aluminium recovered from its lowest levels in nearly a year and other prices on the London Metal Exchange gained after data showed Chinese banks extended 1.02 trillion yuan ($ 163 billion) of new loans in February, well above market expectations.
The rise in the euro against the dollar for the first time in two weeks, recovering from a 12-year low, was another bright spot. A weaker dollar makes commodities priced in the US currency cheaper for buyers in Europe.
“We’d had a bit of a breather in the dollar and that’s lending a bit of support,” said Stephen Briggs, metals strategist at BNP Paribas in London. “Today’s an up day, but copper is being whiplashed back and forth by about $ 100 each day.
It’s not showing a clear trend right now.”
Three-month LME copper jumped by 2.1 percent to $ 5,850 a tonne in official midday trading after touching $ 5,884, its highest point since March 3.
Copper dipped to a small loss in the previous session and slipped to its weakest since Feb. 24 at $ 5,710 a tonne.
One trader said the Chinese data triggered short-covering in Asia and the market saw fresh momentum-led buying when London opened. During March so far, LME copper has been largely trapped in a range of $ 5,700-$ 5,900 after recovering from 5-1/2 year lows in January.
Traders said demand for spot copper in China strengthened only marginally this week after most factories returned from near month-long Lunar New Year holidays.
The second quarter is generally the strongest for consumption in China, which accounts for around 40 percent of global refined copper demand. Some bullish investors have taken heart from recent announcements of production hiccups at copper mines, but Briggs was cautious.
“This idea that supply disruptions for copper will come to the rescue is questionable.
We have disruptions every year. My best guess is that we stay in surplus this year and next.” Aluminium rose 0.3 percent to $ 1,753 a tonne in official rings after touching a near one-year low of $ 1,744.85 on Wednesday.
Weighing on the market was data showing aluminium stocks held at three major Japanese ports climbed for an 11th month to hit a record high at the end of February due to robust imports.
Other metals failed to trade in official rings. Zinc was bid up 0.9 percent at $ 2,013 a tonne, lead was bid up 0.3 percent at $ 1,814, nickel was bid up 0.9 percent at $ 13,900 and tin was bid up 0.1 percent at $ 17,450.
Copyright Reuters, 2015
