Copper prices rose overnight as available stockpiles in London Metal Exchange (LME) warehouses tumbled and a spike in the cost of metal for immediate delivery pointed to a tightening market.
The dollar also slid to its weakest in nearly two years, making metals cheaper for buyers outside the United States.
Benchmark copper on the LME was up 0.8 per cent at $US6,534.50 a tonne at 1600 GMT, pushing towards last week’s two-year high of $US6,633.
The metal has rebounded from a low of $US4,371 in March as the coronavirus spread, and Chinese efforts to stimulate their economy by building metals-intensive infrastructure will support prices, said Capital Economics analyst Kieran Clancy.
“The general trajectory over the next 18 months is an upwards one,” he said.
On-warrant copper inventories in LME-registered warehouses fell to 55,950 tonnes from about 250,000 tonnes in mid-May.
The premium for LME cash copper over three-month metal jumped to a 16-month high of $US24.50 a tonne from a $US30 discount in May. A premium signals tighter nearby supply.
Miner Antofagasta and workers at its Zaldivar mine decided to extend government-mediated talks for a new union contract and avoid a strike.
Meanwhile Elon Musk, boss of electric car maker Tesla, has urged miners to produce more nickel for batteries.
China’s June aluminium imports surged by more than 490 per cent year on year to an 11-year high of 288,783 tonnes as traders took advantage of lower prices abroad.
Citi raised its aluminium price forecasts to $US1,900 a tonne in 2021 and $US2,000 a tonne in 2022.
Surveys showed growing consumer and business confidence in France and Germany, but South Korea plunged into recession in the second quarter.
LME aluminium was up 0.8 per cent at $US1,705 a tonne, zinc rose 1.1 per cent to $US2,237, nickel gained 4.1 per cent to $US13,670, lead added 1.2 per cent to $US1,826.50 and tin was up 1.5 per cent at $US17,850.