Copper hits 3-year high on rosier China economy

MELBOURNE — London copper prices charged through the $7,000 mark for the first time in three years on Monday, underpinned by improving manufacturing profits in China that pointed to robust growth in the world’s top user of metals.

China’s producer price inflation unexpectedly accelerated to a six-month high in September as a construction boom showed no signs of abating and as a government crackdown on air pollution triggered fears of winter shortages.

The inflation reading followed data showing China’s copper imports surged in September, fueling optimism about demand, said analyst Helen Lau of broker Argonaut Securities in Hong Kong.

“Based on these quite solid fundamentals, people will react very positively to any newsflow on copper,” she said.

London Metal Exchange ( LME) copper struck $ 7,083.50 a ton, the highest since September 2014, and traded at $ 7,058 by 0550 GMT, up 2.60%. Prices have climbed nearly 9% so far this month and are up 27% year to date, the biggest annual gain since 2010.

Shanghai Futures Exchange copper rallied 3% to 55,000 yuan ($8,364), the highest since February 2013.

China’s unwrought copper imports surged by 26.50% in September from a year ago, customs data showed on Friday, but remained on course for an annual drop in 2017. China’s economy is expected to grow seven percent in the second half of this year, the country’s central bank governor said, defying economists’ expectations for a slowdown.

Supporting oil prices, Iraqi forces began moving at midnight on Sunday towards oil fields held by Kurdish Peshmerga fighters near the oil-rich city of Kirkuk.

The Chinese city of Binzhou, home to top global aluminum producer China Hongqiao Group, has ordered the closure of around 2.57 million tons of smelting capacity this winter, according to Reuters calculations based on government document.

In a potential boost to US copper and aluminum demand, the Trump administration is requiring the use of North Americanmade steel, aluminum, copper and plastic resins in cars and trucks sold under North American Free Trade Agreement rules.

Hedge funds and money managers raised net long positions in copper futures and options for the first time in five weeks, in the week to Oct. 10, US Commodity Futures Trading Commission data showed on Friday. —