Copper prices climbed to a six-week high as the prospect of stronger demand in top consumer China and output disruptions outweighed expectations of rising supplies from producers emerging from new coronavirus lockdowns.
Traders said copper rose on some purchases in low volume markets as New York opened.
Benchmark copper on the London Metal Exchange was up 0.7 per cent at $US5,261 a tonne at 1550 GMT.
Prices for the metal used in the power industry and construction earlier touched $US5,280 a tonne, a rise of 20 per cent since the four-year low of $US4,371 hit on March 19.
“At the start of the quarter, the market was positioned for a significant surplus, which so far hasn’t materialised and that has supported prices,” Deutsche Bank analyst Nicholas Snowdon said, adding it was too soon to say prices had bottomed.
“The dynamics around the virus are constantly shifting, the next phase is lockdown policy adjustments in key producing countries, how that feeds into supply improvement and the softening effects on markets.”
More than 3.11 million people are reported to be infected by the new coronavirus globally and 216,667 have died, the latest Reuters tally found.
China’s factory activity likely rose for a second straight month in April as more businesses reopened from strict lockdowns implemented to contain the coronavirus outbreak, which has paralysed the global economy.
Markets will also scrutinise China’s April industrial production, investment and social financing data over coming days, for clues to future consumption.
As mining heavyweights South Africa and Peru act to lift lockdowns, workers in deep mines are resisting going back to work without adequate protective gear and information about cases at sites.
South Africa, the world’s largest producer of platinum, manganese and chrome ore, is letting its mines run at half-capacity after a national lockdown.
Peru, the world’s number two copper producer, hopes to end its own lockdown on May 10.
Copper prices have been hemmed in the 21-day moving average, providing support at $US5,050 and the 50-day moving average creating strong resistance at $US5,288.
Prices of the metal used to galvanise steel hit $US1,949 a tonne, the highest since April 20, on worries about supplies due to coronavirus-linked lockdowns in key producing countries.
Concern about availability has also narrowed the discount for the cash over the three-month zinc LME contracts to $US6.25 a tonne from a number around $US20 on March 4.
Three-month zinc gained 0.7 per cent to $US1,945 a tonne.
Aluminium was up 0.1 per cent at $US1,506, lead added 0.3 per cent to $US1,648, tin fell 0.3 per cent to $US15,295 and nickel rose 0.5 per cent to $US12,350 a tonne.