Copper chalks up biggest weekly gain since August on China demand expectation

LONDON — Copper registered its largest weekly gain since late August, underpinned by expectations of strong demand from top consumer China, though a strengthening dollar capped price rises.

Benchmark copper on the London Metal Exchange (LME) ended 0.50% down at $ 6,667 a ton after peaking at $6,724, the highest since Sept. 12. The metal used in power and construction has risen by more than 20% this year and was on track for a 2.90% weekly gain.

A deficit in the global refined copper market in the last three months of the year would keep prices high, said ABN AMRO analyst Casper Burgering.

“The base case for copper remains solid ... There are no indications that demand will slow,” he said, predicting prices at $6,800$6,850 by the end of the year.

Trading activity was low with Chinese markets closed on the last day of the country’s Golden Week holiday.

German industrial orders bounced back in August, rising more than expected on strong foreign demand.

The US currency was set for a fourth consecutive week of gains, helped by expectations of a US interest rate rise in December. A stronger dollar makes industrial metals more expensive for holders of other currencies, potentially dampening demand.

US employment fell in September because of the impact of hurricanes Harvey and Irma, but the unemployment rate and wage growth suggested an improving labor market.

Support was around $ 6,5806,600 with resistance at $6,7756,800, said brokers Marex Spectron in a note. The 50- day and 21- day moving averages were both around $6,550 a ton.

Three- month zinc closed 1.60% down at 3,235 a ton, having reached a 10- year high of $3,308.75 on Wednesday.

Zinc prices have increased by more than 26% this year as a Chinese crackdown on polluting industry curbed output, with inventories in LME warehouses dropping to their lowest since 2009. A shortage of immediately available metal in LME warehouses pushed the premium for LME cash zinc over the threemonth contract to $65.50 a ton, close to last month’s 10-year high of $66.

Three-month aluminum ended 0.80% down at $ 2,154 a ton while nickel finished with a 0.60% gain at $10,600. Tin fell by 1.90% to $ 20,550 by the close, with lead finishing 2.30% down at $2,533. —