Copper on track for large weekly gain in 11 months
LONDON — Copper prices climbed on Friday on track for their largest weekly gain in eleven months, helped by falling inventory and expectations of more economic support from top consumer China.
Three-month copper on the London Metal Exchange (LME) had gained 2.1% to $8,488 a metric ton at 1656 GMT. Prices of the metal used in the power and construction industries are up 3.9% so far last week, the highest weekly rise since March last year.
Earlier in the session it hit a two-week high of $8,495.50, breaking through major technical barriers including 21-day, 50-day and 200-day moving averages, in what traders said was subdued trade due to China’s Lunar New Year holiday.
Further support from China’s government could come in varying forms, including measures to boost consumption, which could be positive for its base metals demand, said SEB Chief Commodity Analyst Bjarne Schieldrop.
Last year’s clampdown on private sectors, and other measures that had a negative impact on consumer confidence, could be reversed as the Chinese government prioritizes economic stability, Mr. Schieldrop said.
However, dollar strength capped gains for industrial metals prices, particularly after US producer prices affirmed expectations that the US Federal Reserve would delay interest rate cuts until the middle of 2024 or later.
A stronger US currency makes dollar-priced metals more expensive for holders of other currencies.
Copper inventories in LME-registered warehouses at 130,675 tons are at their lowest in six months.
Falling stocks have helped narrow the discount for the cash copper contract against the threemonth contract. It was last at $88 a ton, down from a record high of $113.30 on Feb. 9.
In other metals, zinc gained 1.1% to $2,381 with continued inflows to LME-registered warehouses in Singapore, which at 264,825 tons are near their highest since June 2021.
Aluminum lost 0.3% to $2,219; lead gained 0.9% to $2,060; tin dropped 1.4% to $26,915; and nickel advanced 0.9% at $16,405. —