Copper prices were heading for a fifth consecutive weekly gain on Friday as inventories declined and stock markets rose while demand improved in top consumer China.
Investors are increasingly optimistic about an economic rebound, with the mood bolstered after China said it had brought a new coronavirus outbreak under control.
Benchmark copper on the London Metal Exchange (LME) was up 0.5 per cent at $US5,835 at 1602 GMT for a gain of nearly 1 per cent this week.
The metal, used in power and construction and often seen as a bellwether for the global economy, has risen 34 per cent from March lows and is nearing January’s pre-coronavirus high of $US6,343.
Prices have also been supported by massive central bank stimulus and plans for metals-intensive infrastructure spending, said Saxo Bank analyst Ole Hansen.
“From a short-term perspective it looks difficult to point your finger at something that could upset the party,” he said.
On-warrant copper stocks in LME-registered warehouses fell by 10,025 tonnes to 127,875 tonnes, down from about 250,000 tonnes in mid-May.
Total inventories in Shanghai Futures Exchange (ShFE) warehouses shrank by 18,162 tonnes to 109,969 tonnes in the week to Friday, taking stocks to their lowest since January 2019.
Chinese Yangshan copper import premiums climbed to $US95 a tonne from $US84 at the start of the week, pointing to a pick-up in demand.
China’s copper consumption is expected to be 2 per cent higher in the second quarter than in the same period in 2019, said VTB Capital analyst Dmitry Glushakov.
US President Donald Trump threatened again to cut ties with China, though a US diplomat said China had committed during talks this week to follow through on the previously agreed Phase 1 trade deal.
LME aluminium was down 1.1 per cent at $US1,589 a tonne, zinc rose 1.2 per cent to $US2,075.50, nickel fell 1 per cent to $US12,770, lead dropped 1.6 per cent to $US1,781 and tin was up 0.2 per cent at $US16,920.
Zinc and lead were higher over the week, while aluminium and nickel were roughly flat and tin was lower.