Make Kitco Your Homepage

METALS-China demand optimism propels copper to 5-month high

Kitco News

(Updates prices, adds comment) By Pratima Desai LONDON, Nov 14 (Reuters) - Copper prices hit near five-month highs on Monday on optimism about demand in top consumer China after officials moved to shore up the country's property sector and ease its strict COVID restrictions. However, selling spurred by a firmer dollar, higher inventories and profit-taking saw copper prices later retreat. Benchmark copper on the London Metal Exchange was down 1.4% at $8,373 a tonne at 1702 GMT from an earlier $8,600 a tonne, the highest since June 23. China's easing of COVID-19 restrictions included shortening quarantines by two days for close contacts of infected people and for inbound travellers but a full dismantling of COVID controls may be a long way off. "Relaxed protocols for COVID prevention helped start the rally last week," said Giles Coghlan, analyst at broker HYCM. "The announcement of the 16 point property support plan is further good news supporting a return to demand for copper and underpinning prices." A notice to financial institutions from Chinese regulators outlined steps to support the industry, including loan repayment extensions, in a major push to ease the deep liquidity crunch which has plagued the property sector since mid-2020. Meanwhile, receding worries about copper supply on the LME market due to rising stocks weighed on prices, while the premium for the cash over the three-month contract has retreated to near zero from $135 a tonne only three weeks ago. Latest data shows copper stocks in LME registered warehouses rose 8,925 tonnes to 86,800 tonnes. Cancelled warrants - metal earmarked for delivery - at 28% are down from 66% since Oct. 26. Copper prices were also buffeted by a higher U.S. currency, which when it rises makes dollar-priced metals more expensive for holders of other currencies. In other metals, aluminium was down 1.4% at $2,430 a tonne after the LME's decision not to ban Russian metal from being traded and stored in its system.

"How much further pressure we will see on metals prices going forward will depend on whether we see a significant inflow of Russian metals into LME warehouses in the weeks and months ahead." analysts at ING said. Zinc was up 2.7% at $3,108, lead rose 1.1% to $2,186, tin gained 0.9% to $21,500 and nickel gained 1.0% to $27,200. Nickel earlier jumped 15% to $30,960 a tonne, the highest since May as funds and traders reversed bets on lower prices in an illiquid market ahead of contract settlement on Wednesday. (Reporting by Pratima Desai; editing by Emelia Sithole-Matarise, Kirsten Donovan and Sandra Maler)

LME price overview COMEX copper futures All metals news All commodities news Foreign exchange rates SPEED GUIDES ))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.