SINGAPORE — London copper prices eased on Thursday after hitting their highest level since January in the last session, but traders said global stimulus would fuel a quick rebound.
Three-month copper on the London Metal Exchange fell 1% to $5,848 a tonne by 0454 GMT, while the most-traded copper contract on the Shanghai Futures Exchange rose 1.5% to 47,280 yuan ($6,687.70) a tonne, tracking overnight gain in London.
“The rally should still have legs. Injection of funds is still on-going and will stay there to avoid asset price from collapsing,” said a Singapore-based trader.
Traders and brokers said the copper rally was now driven by a weaker U.S. dollar and liquidity injections by central banks, compensating a weakening demand recovery in top consumer China that has been supporting prices in recent months.
“In such a liquidity-driven market, copper usually stands out against its base metals peers due to its superior identity as a financial asset versus its identity as an industrial metal,” ING analyst Wenyu Yao said in a note.
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“We would not be too surprised to see copper testing the $6,000-a-tonne level.
* CHINA COPPER: Major Chinese smelters’ refined copper cathode output in May dropped 2.7% from April to 678,000 tonnes, research house Antaike said.
* SOUTH KOREA: South Korea’s exports for the first 10 days of June soared 20.2% year-on-year.
* CODELCO: Unionized workers at top miner Codelco in Chile said they were considering walking off the job at some sites to implement a self-imposed quarantine after a member died from COVID-19.
* OTHER PRICES: LME zinc rose 0.2% to $2,024.50 a tonne, while ShFE aluminum advanced 0.3% to 13,660 yuan a tonne and ShFE zinc climbed 1.3% to 16,650 yuan a tonne.