Copper prices reached two-year highs overnight in a buying frenzy triggered by worries over strikes and supplies from top producer Chile and flooding in China.
Benchmark copper on the London Metal Exchange (LME) was up 2.5 per cent at $US6,572 a tonne at 1602 GMT.
Prices of the metal used widely in the power and construction industries earlier touched $US6,633 a tonne, its highest level since June 2018 and up more than 50 per cent since hitting four-year lows in March.
“Miners at Antofagasta’s Zaldivar mine in Chile voting to strike provided a tailwind to disruptions at Codelco due to COVID-19,” said ING analyst Wenyu Yao.
“Antofagasta’s Centinela mine will soon conclude voting on whether to accept a wage offer or go on strike, which is another upside risk for copper.”
Codelco, the world’s largest copper producer, and other miners in Chile have altered shift patterns, suspended upgrades and smelter operations in an effort to stop the spread of the new coronavirus.
Traders are worried that flooding in China’s Jiangxi province could eventually affect copper production.
Jiangxi Copper, one of the country’s biggest copper producers, has so far been largely unaffected by the floods because most of its transportation is by rail.
Much of the buying in base metals markets is by funds in China and elsewhere, jumping on the uptrend of recent days.
Clues to demand prospects will come from Chinese urban investment, house prices and industrial production data on Thursday.
Worries about supplies on the LME market in the face of falling stocks and cancelled warrants – metal earmarked for delivery – pushed cash copper’s premium over the three-month contract to a 14-month high above $US11 a tonne.
Between May 2019 and June 2020 the cash contract mostly traded at a discount.
Aluminium was up 0.1 per cent at $US1,691 a tonne, zinc gained 2.9 per cent to $US2,257, lead rose 1.4 per cent to $US1,881, tin climbed 0.4 per cent to $US17,380 and nickel added 1.5 per cent to $US13,715.