Copper prices rose overnight as stockpiles in London Metal Exchange warehouses dwindled and positive industrial data and government stimulus pointed to rising demand.
Benchmark copper on the LME was up 0.8 per cent at $US6,473.50 a tonne at 1622 GMT, near a two-year high of $US6,633 reached on July 13.
WisdomTree analyst Nitesh Shah said prices, already higher than before the COVID-19 pandemic, should continue to rise as demand recovers and as coronavirus safety measures restricted production.
But he said a spike in cases in many parts of the world raised questions whether demand growth would “be as vigorous as expected”.
On-warrant copper stocks in LME-registered warehouses fell to 44,850 tonnes from around 250,000 tonnes two months ago.
Underlining the short supply of nearby metal, cash copper is trading at a premium to three-month metal.
Export expectations in Germany rose in July, new orders rose last month for US-made capital goods and profits at China’s industrial firms increased in June.
The US Federal Reserve said it would extend several of its lending facilities through to the end of the year, helping stimulate economic activity and supporting asset prices.
Senate Republicans on Monday proposed a $US1 trillion coronavirus aid package.
The US dollar steadied near two-year lows that have made metals cheaper for buyers holding other currencies.
Supervisors at Antofagasta’s Centinela copper mine in Chile agreed to a new contract offer, the union president said.
Nations in Asia introduced restrictions and Britain imposed a quarantine on travellers from Spain, as the world confronted the prospect of a second wave of coronavirus infections.
Moderna and Pfizer launched trials of coronavirus vaccines that could clear the way for regulatory approval and widespread use by the end of this year, they said.
LME aluminium was up 1.1 per cent at $US1,726 a tonne, zinc rose 0.8 per cent to $US2,254, nickel slipped 0.1 per cent to $US13,705, lead was up 0.5 per cent at $US1,860.50 and tin was 0.1 per cent lower at $US18,010.