Copper climbed to its highest mark in over five months on better-than-expected factory data from top consumer China and supply disruptions in Chile, the world’s largest miner of the metal.
China’s factory activity last month grew at its fastest level since December, while Chile’s state-owned miner Codelco shut refinery and foundry operations at its Chuquicamata division due to the spread of coronavirus.
Three-month copper on the London Metal Exchange rose to as high as $US6,094 a tonne, a level unseen since January 23. By 1634 GMT, the metal was up 0.6 per cent to $US6,054 per tonne.
“The copper market is pricing in a big hit to production in Chile,” said Julius Baer analyst Carsten Menke.
“Chinese demand is the other element, where we have seen high growth recently … which is evidence of some restocking.”
Sentiment was supported by reports that China’s central bank will cut the re-discount and re-lending rates by 25 basis points in a move that will reduce funding costs for smaller firms and rural sectors.
LME copper stocks hit their three-month low at 213,325 tonnes, while ShFE copper inventories were at their lowest since January 2019 at 99,971 tonnes.
Chinese domestic refined copper prices climbed to 48,910 yuan a tonne, their highest mark since January 17, but premiums of imported copper into China have been flat for a week.
The global nickel market surplus narrowed to 8,800 tonnes in April from an downwardly revised 10,900 tonnes the previous month, data from the International Nickel Study Group showed.
Activity in Peru’s mining and hydrocarbons sector plummeted 46 per cent in May from a year earlier, the third straight monthly drop, the government said, due to a lockdown to fight the COVID-19 pandemic.
LME aluminium was up 0.1 per cent to $US1,621 a tonne, zinc fell 0.4 per cent to $US2,021.50, lead was steady at $US1,774.50, tin rose 0.4 per cent to $US16,795 while nickel added 0.4 per cent to $US12,855.