Copper prices pushed higher overnight, bucking the shift to safe-haven assets in other financial markets, as a surge in coronavirus cases fuelled worries about mine shutdowns and shortages.
Unionised mine workers in Chile demanded an investigation into the death of a third miner from coronavirus at state-run Codelco.
While copper often weakens when investors sell off riskier assets, it went in the opposite direction to global stocks, which edged lower on rising COVID-19 infections and an IMF warning of a slide in the global economy.
“Even though we may have some doubts about demand regarding the further growth downgrades from the IMF, we certainly have supply worries as well,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“That potentially squeezed out a few sellers who had jumped on the low-growth narrative, but there’s a supply narrative as well that needs to be kept an eye on. The $US6,000 level will undoubtedly attract some attention and that’s acting as a magnet to the market.”
Three-month copper on the London Metal Exchange was up 0.4 per cent at $US5,887.50 a tonne by 1600 GMT, having rebounded 35 per cent since touching a 45-month low on March 23.
“Copper’s COVID-19 mine disruption tally is now closing in on half a million tonnes – five times the 100,000 tonnes we estimated back in March,” analyst Vivienne Lloyd of Macquarie said in a note.
Falling inventories also bolstered copper as LME on-warrant stocks eroded further, declining to the weakest levels since January, LME data showed on Thursday, having slid by more than half over the past month.
In China, copper inventories in warehouses tracked by ShFE fell for a sixth straight week to their lowest in more than 17 months.
The discount of cash LME copper to the three month contract declined to $US8.50 a tonne by Wednesday’s close, the weakest in about three months, indicating tighter supplies in LME warehouses. It was last at $US10.50.
Aluminium fell 0.5 per cent to $US1,568.50 a tonne, zinc added 0.5 per cent to $US2,047.50, lead advanced 0.8 per cent to $US1,776.50, nickel eased 0.9 per cent to $US12,440 and tin shed 0.5 per cent to $US16,580.