Chinese demand pushes copper back towards multi-year highs

Copper rose to a threeweek high on Monday as solid demand from top consumer China and the threat of strikes by miners in Chile pushed prices closer to 27-month highs reached in September. Benchmark three-month copper on the London Metal Exchange (LME) was up 0.2% at $6,773.50 a tonne at 1058 GMT after touching $6,785.25.

The metal used in power and construction hit $6,877.50 on Sept. 21, up 57% from a low in March as Chinese industry reopened and speculators bought into the rally. Strong Chinese consumption is now priced in and gains are likely to slow, said Capital Economics analyst Kieran Clancy, warning that new coronavirus outbreaks could derail demand.

"We are going to enter into a more gradual, steady climb upwards," he said. The union at Chile's Escondida mine rejected BHP's final offer in contract negotiations, but the miner said it would meet the union again in a bid to avoid a strike. China will invest close to $900 billion over the next five years to develop the country's copper-intensive power grids, state media reported. China's exports likely posted a fourth straight month of gains in September, a poll showed.

Copper cathode production by Chinese smelters rose 3% in September from August, with output over

January-September down 1.6% year-on-year at 6.26 million tonnes, researchers Antaike said. China's currency has surged to its strongest against the dollar since early 2019, making metals more affordable for Chinese buyers. Chinese Yangshan copper premiums rose to $53.50 a tonne, the highest since Sept. 23 but still far below the 2020 peak of $113.50. SMM-CUYP-CN

Speculators on the Comex exchange cut their net long position to 69,806 contracts from 87,308 contracts in late September. OTHER METALS: LME aluminium was up 0.6% at $1,852 a tonne, zinc rose 1.2% to $2,462.50, nickel gained 0.3% to $15,270, lead added 0.9% to $1,825.50 and tin was flat at $18,275.