Copper prices rose as much as 2 per cent overnight as investors looked past a US-China confrontation over Hong Kong to the prospect of Chinese economic stimulus that would improve metals demand.
Benchmark copper on the London Metal Exchange (LME) was up 1.4 per cent at $US5,361.50 a tonne at 1630 GMT and near last week’s two-month high of $US5,464.
Prices have rebounded from a four-year low of $US4,371 in mid-March as coronavirus lockdowns unwind but remain far below their levels of more than $US6,000 before the coronavirus crisis.
China, the biggest metals user, last week indicated that it would stimulate its economy through metals-intensive infrastructure building, said Capital Economics analyst Kieran Clancy.
“We are seeing the turning point on the fundamentals side,” he said. “The market is right to be pricing in stronger demand.”
The country will strengthen its economic policy and continue efforts to lower interest rates on loans, central bank Governor Yi Gang said.
Spain and Germany signalled that they would ease travel restrictions and Japan’s central bank said it could take more steps to stimulate the economy.
China’s proposed national security legislation for Hong Kong could lead to US sanctions and threaten the city’s status as a financial hub, a White House official said.
Global equities markets and oil prices rose. Travel and leisure stocks were among the biggest gainers.
April imports of zinc, nickel, aluminium and copper concentrate rose sharply from the previous month, customs data showed. Yangshan copper import premiums, however, fell to $US100 from $US113.50 a week ago.
Bets on lower copper prices on the LME were cut to 9.5 per cent of open contracts by Thursday, from 26 per cent at the start of April, brokers Marex Spectron said.
LME aluminium was up 0.9 per cent at $US1,520 a tonne, nickel rose 0.5 per cent to $US12,310, lead gained 1.6 per cent to $US1,672.50 and tin was up 0.3 per cent at $US15,400.
Zinc bucked the trend, falling 0.4 per cent to $US1,978.