Copper glides to four-month high on technicals, demand uplift

Copper glides to four-month high on technicals, demand uplift

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Copper rose for a fifth straight session to its highest in nearly four months on Wednesday, supported by firm demand and an improved technical picture.

Benchmark copper on the London Metal Exchange (LME) was up 0.5% at $5,800 per tonne by 1110 GMT, after touching its loftiest since Feb. 17 at $5,828.

“Copper is being carried higher by an improved fundamental outlook but also by an improved technical picture,” said Saxo Bank analyst Ole Hansen.

The metal, which is widely used in the construction and power industries, broke through the 100- and 200-day moving averages recently, prompting further buying.

The next area of resistance for LME copper lies at $6,050, Hansen said.

GOLDMAN SACHS: The investment firm raised its copper and aluminum forecasts, and lifted its 12-month commodity returns forecast to 13.1%.

INVENTORIES: On-warrant LME copper stocks fell to their lowest since Feb 24 at 130,225 tonnes, while ShFE copper inventories were at their lowest since Jan. 17.

Bonded warehouse stockpiles in China were last at 213,000 tonnes, near record lows hit last month.

Analysts and traders say the drawn-down LME stocks are headed for China, where prices are higher.

CHINA COPPER: Chinese domestic spot prices of refined copper rose to 46,350 yuan a tonne, their highest since Jan. 23, indicating strong demand in top consumer China.

CHINA INFLATION: Producer prices in China fell at the sharpest rate in more than four years in May, while the consumer price index was at its weakest since March 2019.

U.S. DOLLAR: The greenback is trading at its weakest in three months, supporting prices of dollar-priced commodities.

OTHER PRICES: LME aluminum rose to its highest since March 20, up 1.4% to $1,628 a tonne, zinc eased 0.5% to $2,007, lead shed 1.4% to $1,740.50, tin gained 0.8% to $17,050, and nickel fell 0.3% to $12,875. 

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