Copper climbs to 10-week high on demand optimism
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LONDON — Copper prices hit 10-week highs on Thursday as expectations of stronger demand and economic activity were boosted by countries around the world starting to lift COVID-19 lockdowns.
Benchmark copper on the London Metal Exchange rose to as much as $5,464 a tonne, the highest since March 13, before giving up gains to stand 0.5% lower at $5,413.5 a tonne in official rings.
“The threat of a second wave seems to be receding and more fiscal support coming through is positive for metals and related equities,” said SP Angel analyst John Meyer.
“A key indicator here is oil, which has rallied as China and other parts of the world return to work.”
CRUDE: Oil rose on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand.
TECHNICALS: Major resistance for copper prices comes in at $5,490 where the 100-day moving average currently sits.
“(Copper) is now in clear breakout mode and could move higher still as funds come in,” said Edward Meir, analyst at ED&F Man Capital Markets.
“But we would be more comfortable seeing another close above $5,370 so that we get two consecutive closes above that resistance mark.”
SPREAD: The premium for the cash over the three-month tin contract spiked to $245 a tonne on Wednesday due to worries about nearby supplies on the LME market. It was last at $192 a tonne.
Large holdings of cash contracts and tin stocks in LME registered warehouses at their lowest since May last years have fueled those worries.
Three-month tin was up 0.1% at $15,470 a tonne, having earlier reached $15,735, the highest since March 16.
OTHER METALS: Aluminium rose 0.1% to $1,514.5, zinc fell 2.1% to $1,993.5, lead slid 1.6% to $1,670.5 and nickel climbed 1.3% to $12,827 a tonne. (Reporting by Pratima Desai; Editing by Kirsten Donovan and Jan Harvey)
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