Copper closes higher after five days of losses; zinc, lead and nickel end lower

LONDON — Copper closed higher on Wednesday, clawing back some lost ground after five straight days of decline as expectations that buoyant demand would outstrip supply in the longer term tempted some buyers back to the market.

Prices were also supported by appetite for cyclical assets in the wider markets, with world stocks rising as Republicans rolled out their US tax reform plan.

A stronger dollar capped gains, however.

“Copper prices lost ( ground) at the start of the week significantly,” ABN Amro analyst Casper Burgering said. “But in the longer term, the fundamental base for the copper market is quite good.

“You see not only that demand in China is doing well, but also that in the longer term demand will increase even more from other sectors, like the electric vehicle industry. At this stage the fundamentals are very supportive of stronger prices.”

London Metal Exchange ( LME) copper closed at $ 6,438 a ton, up 0.40% but off an earlier high of $6,491.50. Prices hit their lowest since mid-August last week at $6,366 a ton. The cash to three- month spread on copper narrowed. It widened to the most in a decade on Tuesday, signaling a lack of interest in spot metal.

LME copper stocks fell 1,600 tons on Tuesday, exchange data showed, while 13,350 tons of copper warrants were canceled, meaning the metal had been earmarked for delivery and was no longer available to the market. Most cancellations were in Busan, South Korea.

China’s economic growth probably slipped in the third quarter but was still in far better shape than last year, according to a private survey on Wednesday, which also said major risks were looming for 2018.

Share prices rose as Republicans in the US Congress and the White House called for slashing tax rates on businesses, while rising expectations for a third US interest rate rise this year lifted the dollar.

LME zinc ended the day down 0.40% at $3,105 a ton, extending Tuesday’s 1% loss, while lead finished down 1% at $2,462 a ton.

LME nickel closed down 2.20% at $ 10,240 a ton. Premiums for nickel in Shanghai bonded warehouses surged by $55 to $295 a ton, suggesting some short holders may be rushing to cover ahead of a Chinese holiday next week.

LME tin closed little changed at $20,700, while aluminum finished 0.30% higher at $ 2,132 a ton. —