Copper prices rose to their highest in nearly two months on Monday, buoyed by growing hopes of fresh stimulus and demand in China, a softer dollar and protests at a mine in Panama.
Benchmark copper on the London Metal Exchange (LME) was up 0.9 per cent at US$8,344 a metric ton in official rings, having touched earlier US$8,355 for its highest since September 29.
Hopes for stronger copper consumption were raised by a pledge from China’s central bank to ensure financing support for the property sector, a major consumer of industrial metals.
“There’s a fair amount of stimulus in the pipeline and we are in a seasonally strong period,” said Dan Smith, head of research at Amalgamated Metal Trading.
“For me, copper demand looks strong in China, primarily in the green sectors. “We know utilization rates at wire rod plants picked up into mid-November.”
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Sliding stocks of copper in warehouses monitored by the Shanghai Futures Exchange suggest healthy China demand, traders said. At 31,026 metric tons, they have dropped 90 per cent since February.
The Yangshan copper premium climbed to US$100 a tonne last week and has more than tripled since the start of August, suggesting a need for China to import copper.
Supply concerns come from reduced ore processing owing to protests at First Quantum Minerals’ Cobre Panama mine, which accounts for 1 per cent of global copper output, traders said.
A weaker US currency, meanwhile, makes dollar-priced metals cheaper for holders of other currencies.
Elsewhere, lead hit its highest since January 9 at US$2,308.50 a tonne as funds and traders raised bets on higher prices of the battery material as the market moves into a seasonally strong consumption period.
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