Copper up with equities but capped by investor fears over rising virus cases
LONDON — Copper prices firmed on Wednesday alongside a rebound in equities and a weaker dollar, though investor fears over rising coronavirus cases limited gains.
Three-month benchmark copper on the London Metal Exchange (LME) was up by 1.3% at $9,440 per ton at 4:20 p.m. GMT.
Expectations for a boom in copper demand in the transition to a lower carbon economy and global economic recovery have pushed prices back up toward a near 10-year high of $9,617 a ton hit in February.
“Prices are recovering a little in line with recent developments in stock markets, which came back after sharp losses yesterday,” said Quantitative Commodity Research consultant Peter Fertig.
“The outlook for copper demand is positive, but it might be a bumpy road ahead depending on coronavirus infections.”
Early indications of a rebound in European corporate earnings supported prices while a weaker dollar made commodities more attractive.
Miners BHP Group and Antofagasta posted lower quarterly copper production due to COVID-19 restrictions on their work force in Chile. But BHP still raised its guidance for this year.
The pace of China’s massive inoculation campaign has slowed, Reuters calculations showed. Meanwhile, cases are rising in India and Japan.
Inventories of copper in LMEregistered warehouses continued their downward trend, falling by 900 tons to 159,450 tons. Last week, they touched their highest since November.
The amount of canceled inventory — stock earmarked for delivery — was high at 48%, usually a sign of a shortage of metal.
The LME cash copper contract was at a premium of about $8 a ton over the three-month contract, indicating a low availability of nearby metal.
China’s refined copper output rose by 18.2% year on year in March, but the monthly total of 870,000 tons was the lowest since July, data from the National Bureau of Statistics showed.
LME aluminum gained 2.5% to $2,367 a ton after touching its highest since May 2018.
Zinc was steady at $2,814 a ton, lead gained 0.1% to $2,031 a ton, tin added 0.4% to $26,925 a ton, and nickel gained 0.7% to $16,150 a ton. —