London copper hit its highest in three years on Monday as investment flowed into industrial metals amid surprisingly robust global factory growth. Factories across Asia and Europe cranked up production last month as global demand remained strong, confounding expectations growth may have peaked.
“Chinese demand has been more than what the market generally expected but it is not guns-blazing amazing, which means that supply is playing a key role here,” said Vivek Dhar at Commonwealth Bank Australia in Melbourne, Reuters reported.
“There is latent capacity that could be brought on line but no one is doing it so I think we are likely to have prices at least supported around current levels into the fourth quarter. I think we will get more clarity after China’s Congress in mid-October.”
LME Copper: London Metal Exchange copper was up 0.7% at $6,884 a ton, as of 0716 GMT, extending a 0.7% advance from the previous session. Earlier in the session, prices struck $6,920.25 a ton, their highest since September 2014. Prices are now on track for their biggest annual advance since 2010, up 24%.
SHFE Copper: Shanghai Futures Exchange copper rose as much as 0.8% to 53,150 yuan ($8,131) a ton.
Consumers: The physical copper market has gone quiet, said a physical trader in Singapore. “Even for my customers who might want to buy 500-1,000 tons, they are buying in lots of two (50 tons), hoping that prices will go down again. They know prices could go up, maybe to $7,200, but are waiting for prices to hit the $6,600 mark.”
Investors: Hedge funds and money managers, meanwhile, upped their bullish stance in copper to a fresh record, US government data showed on Friday.
Nickel: LME nickel was the biggest gainer, striking its highest since June 2015 at $12,380 a ton, before trimming gains to $12,155, still up 1%, as steel and its inputs pared a rally fuelled by expectations that China will close capacity over winter to clear its smog-choked skies.
Add new comment
Read our comment policy before posting your viewpoints