Copper hit a one-week high on Tuesday while other metals also gained as the dollar dipped and investors remained upbeat about global growth prospects, though risks of a slowdown remained, especially in top consumer China.
“The prevailing sentiment in copper is bullish based on this synchronized global growth backdrop we’re seeing, but when you’re close to these levels the probability of a slowdown is much higher,” said Julius Baer analyst Carsten Menke, Reuters reported.
“We see an oversupplied copper market next year partly driven by a slowdown in China on the property and infrastructure side, and we have mine production coming back after this year’s strikes.”
Three-month copper on the London Metal Exchange rose 1.3% to $7,094.50 a ton, having earlier touched a one-week high of $7,123. Copper prices breached $7,000 a ton last week for the first time in more than three years.
A private coal mining investor in Shanxi province is the main actor behind a dramatic increase in bullish bets in Chinese copper futures, driving a futures brokerage to a nearly $3 billion position that has fuelled a surge in prices to 4-1/2-year highs.
Aluminum rose 1% to $2,156.50. China’s biggest state-run aluminum producer said consumption of the metal is set to increase by 9-10% this year on the back of strong downstream demand, and keep growing at a faster rate than the country’s gross domestic product in 2018.
Zinc rose 1.6% to $3,179.50 a ton. Data on Monday showed zinc output in China slipped 2.7% in September to 537,000 tons, highlighting worries that winter production cuts are tightening supplies.
LME nickel gained 1.8% to $12,070 a ton. Indonesia’s PT Aneka Tambang Tbk received a recommendation from the mining ministry for an additional 1.25 million tons of nickel ore exports over the next 12 months.
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