Surging stocks push zinc to 10-week low; copper rebounds most in nearly a month

LONDON — Copper prices rose by the most in almost a month on Tuesday, helped by a weaker dollar and expectations of strong demand in China, while zinc touched its lowest since December after an increase in stocks calmed fears about availability.

Benchmark copper on the London Metal Exchange (LME) closed 1.4% higher at $ 7,004 a ton, up from a three-week low on Monday and on track for the biggest gain since Feb. 14.

“The long-term view on copper is still very positive,” said ABN AMRO analyst Casper Burgering.

“Demand will remain sound and we expect some shortages in the second quarter.”

Mr. Burgering said the metal, used in power and construction, would likely finish the year around $ 7,100-$ 7,150 a ton. In December it touched a four-year high of $7,312.50.

Copper price increased above its technically important 100- day moving average at $ 6,968.

Data in the next few weeks in China — the world’s biggest metals consumer — is expected to show that growth was mostly stable at the start of the year as exports picked up and factory activity remained largely resilient.

The US dollar weakened sharply, helping push up dollar- denominated metals by making them cheaper for users of other currencies.

LME zinc finished up 0.20% at $ 3,302 a ton after touching $3,272, the lowest since Dec. 28, following a surge in exchange inventories. On-warrant stocks available to the market in LMEregistered warehouses have risen by 111% in two days to 177,000 tons, reducing fears of supply shortages that drove zinc, used to galvanize steel, to a 10-and-ahalf-year high last month.

Inventories in Shanghai Futures Exchange warehouses have also doubled to 150,000 tons this year.

The premium for cash zinc over the three- month contract fell to $3 from $50 late last month, signaling greater availability.

Investors were reducing bets on higher prices, with the net long position in LME zinc down to 5.4% of active contracts from 29% on Feb. 1, brokers Marex Spectron said.

LME aluminum closed up 0.10% at $2,147 a ton after an official in top producer China said the country would continue to reduce aluminum capacity this year.

The price of cash aluminum has fallen below the three-month price, suggesting that traders see ample supply.

Among other industrial metals, LME nickel closed up 1.9% at $ 13,690 a ton, lead ended 0.50% higher at $2,438 while tin finshed down 0.60% at $21,430. —