Copper prices climbed for a fourth straight session overnight as China reported a rise in imports for the metal and an unexpected jump in overall exports, signalling a rebound in the health of world’s second-largest economy.
Benchmark three-month copper on the London Metal Exchange touched a high of $US5,295 a tonne, its highest since March 17. By 1657 GMT, it was trading 1.5 per cent up at $US5,279 a tonne.
China, which accounts for about half of copper consumption, is rebooting after the coronavirus pandemic shuttered most of its economic activity.
“We see China offering upside support across the metals spectrum for the remainder of the year,” said Timothy Wood-Dow, an analyst at BMO Capital Markets.
This was because the Asian country was reflating its economy by leaning on demand support rather than supply restrictions, he added.
“However, whether this is enough to offset the drop across other parts of the globe is unclear.”
China’s unwrought copper imports rose 4.4 per cent in April from the prior month, while aluminium exports saw their lowest monthly total since October on dwindling orders from overseas.
In signs of rising demand, on-warrant LME inventories of copper fell to their lowest in a month, slipping 250 tonnes to 190,200 tonnes.
In China, stocks in Shanghai Futures Exchange warehouses are at their lowest since February at 230,956 tonnes.
Chinese Yangshan copper import premiums soared to $US105, their highest since November 2018. The premium reflects the amount that buyers are willing to pay on top of LME copper price to seize the physical delivery.
Vehicle sales in China likely rose in April from a year earlier, its top auto industry body said on Thursday, ending almost two years of declines.
China’s exports rose in April for the first time this year but a double-digit fall in overall imports signalled more trouble ahead as the global economy sinks into recession.
ING analysts warned that the resumption of a US-China trade war could hurt exports in the future.
Peruvian miners are set to restart operations in the coming days and ramp up to around 80 per cent of normal production levels within a month, a senior official at the country’s mining industry group told Reuters.
The country, the world’s number two copper producing country, is looking to rebound from the impact of the coronavirus pandemic.
Zinc hit its highest in nearly five weeks on buying from computer-driven speculative funds. The metal, used to galvanise steel, gained 1.1 per cent to $US1,998 per tonne.
LME aluminium rose 0.5 per cent to $US1,487 a tonne, lead was up 1 per cent at $US1,646, tin was steady at $US15,210, while nickel was down at $US12,185.