LONDON: Copper prices touched their highest in more than five weeks on Friday but came off the peak as data showed growing inventories on the London Metal Exchange (LME), highlighting an improving supply picture.
Three-month copper on the LME was up 0.2% at $8,576 per metric ton by 1610 GMT after touching $8,634 for the highest level since May 10.
The metal pulled back after LME data showed 16,350 tonnes of copper had arrived into LME warehouses, boosting total stocks by 14%.
“As prices go higher, it would tend to flush any surplus metals out of the system. You can get metal popping up in unexpected places,” said Dan Smith, head of research at Amalgamated Metal Trading.
Copper is expected to register a global market surplus of 240,000 metric tons this year after a deficit of 180,000 tons in 2022, Liberum said in note.
LME copper has rebounded nearly 10% since touching its lowest in almost six months on May 24. It has climbed 2.4% this week, set for its third consecutive weekly gain.
Smith said he was bullish on copper but felt the recent wider rally among other base metals was hard to justify and was largely being driven by speculators.
Also supporting copper was news that Boliden’s Ronnskar smelter in Sweden declared force majeure after a fire.
Copper stocks on the Shanghai Futures Exchange fell 20.1% in the week to Friday, having dropped 70% from a February peak.
But actual consumption in China remained subdued.
“Recently, higher prices have curbed our willingness to buy copper, given the slow demand in the traditional off-peak season,” said one Chinese copper rod producer.
The premium for LME cash tin over the three-month contract remained strong at $1,292.50 a metric ton. That was only slightly lower than Thursday, when it touched the highest since November 2021, with one company holding more than half of the inventory in LME-registered warehouses.
LME three-month tin fell 0.9% to $26,985 after touching its highest in almost two months at $27,675.
LME aluminium gained 0.8 to $2,267.50 a metric ton, lead added 0.2% to $2,134.50, while nickel dipped 0.4% to $22,900 and zinc shed 0.5% to $2,469.
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