Copper prices climbed to three-month highs overnight as economic stimulus from central banks, expected stronger demand in top consumer China and falling inventories in Shanghai triggered fresh buying.
Benchmark copper on the London Metal Exchange (LME) was up 0.2 per cent at $US5,700 a tonne at 1549 GMT. The metal used widely in the power and construction industries earlier touched $US5,708.50, its highest since March 5.
“Central banks are providing a lot of liquidity, some of which is finding its way to copper and other industrial metals,” said ING analyst Wenyu Yao. “There are some concerns about demand, but the recovery story in China still looks good.”
Central banks have cut interest rates in recent months, provided unprecedented amounts of stimulus to soften the blow to the global economy from the coronavirus pandemic and to keep markets functioning.
Stocks of copper in warehouses monitored by the Shanghai Futures Exchange have dropped to 139,913 tonnes from 380,085 tonnes in the middle of March.
Copper stock in LME-registered warehouses, at 237,900 tonnes, are down 15 per cent since the middle of May. Traders say that much of the draw on LME stocks is headed for China, where prices are higher.
If copper manages to sustain levels above the 200-day moving average at $US5,655, the next major resistance comes in at a Fibonacci retracement level of $US5,880.
The premium for cash tin over the three-month contract is at a one-year high around $US216 a tonne, on concern about historically low LME stocks.
Three-month tin was 1.2 per cent up at $US16,750.
Aluminium was up 0.8 per cent at $US1,604 a tonne, zinc dropped 0.8 per cent to $US2,036, lead ceded 0.6 per cent to $US1,765 and nickel was up 0.3 per cent at $US13,025.