LONDON: Copper prices rose above $9,000 a tonne on Wednesday for the first time since June on hopes that Chinese demand will rebound after the country removed its COVID-19 restrictions.
Also helping prices was a weaker dollar. Expectations that U.S. interest rates will soon stop rising have pushed the greenback to a seven-month low, making dollar-priced metals more affordable for buyers with other currencies.
Global equities rose ahead of U.S. inflation data due on Thursday that markets predict will show a further slowing of price increases.
Benchmark copper on the London Metal Exchange (LME) was up 0.9% at $8,990 a tonne in official trading, having gone as high as $9,074.
The metal used in power and construction has risen around 8% already this year.
Copper fell sharply in mid-2022 as the global economy slowed, interest rates rose and the dollar strengthened.
China’s retreat from its zero-COVID policy caused a huge spike in infections, but investors expect it to lift metals demand through the year.
“It does look as if the COVID wave (in China) has peaked already and that we could see a rapid pickup in activity from now,” said Capital Economics analyst Caroline Bain.
LME copper slips from 6-month high as demand outlook in focus
But she said that because the Chinese industry had been relatively resilient through zero-COVID, demand for metals was unlikely to rebound as strongly as demand for energy, adding that the copper market would be well supplied in 2023 and prices may have risen too far too fast.
Analysts at the Minmetals Economic Research Institute said a solid break above resistance around $8,600-$9,000 may see prices rise towards $11,000.
On the supply side, a row in Panama deepened as the government doubled down on an order that First Quantum Minerals Ltd halt operations at a copper mine.
LME aluminium was up 0.9% at $2,486 a tonne, zinc gained 0.1% to $3,163, nickel rose 1.4% to $27,850, lead fell 0.8% to $2,182 and tin was up 3.3% at $26,725.
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