LONDON: Copper prices touched their highest in five weeks on Thursday on better-than-expected trade data in top metals consumer China while zinc also surged due to a cut in output at a major South Korean smelter.
Three month copper on the London Metal Exchange had gained 0.7% to $8,639 a metric ton by 1555 GMT, the strongest since Jan. 31. US Comex copper futures rose 1.2% to $3.92 a lb. Data showed that China’s export and import growth in the first two months of 2024 beat forecasts. “The Chinese trade data was quite good, with exports being strong. Copper imports were up as well, so it looks like demand is doing all right actually,” said Dan Smith, head of research at Amalgamated Metal Trading. China’s unwrought copper imports rose 2.6% year-on-year in January and February, customs data showed. The Yangshan copper premium rose to $60 a ton on Wednesday, the highest since Jan. 19, indicating improving demand for copper imports into China.
Al Munro at broker Marex said in a note that a surge of buying in the morning was driven by Commodity Trade Advisor (CTA) investment funds, largely driven by computer programs. LME zinc also hit a five-week high, fuelled by a 20% production cut at Young Poong Corp’s Seokpo smelter in South Korea, analysts and a trader said.
LME zinc were up 1.5% at $2,533 a ton after touching $2,540, the highest since Jan. 31.
Another trader said the rally was also due to tight zinc concentrate supply, but added that Chinese demand had so far remained flat versus last year. “Zinc consumption from downstream galvanizing manufacturers in northern China has recently been subject to environmental protection and production restrictions, and demand has been mediocre,” said Huatai Futures in a report. Also helping to support metals was a weaker dollar index, which hit a one-month low, making commodities priced in the US currency less expensive for buyers using other currencies. LME aluminium rose 1.2% to $2,261 a ton, nickel climbed 1.1% to $17,910, lead advanced 1.7% to $2,100.50 and tin was also up 1.7% at $27,650 after hitting $27,680, the strongest since August last year.
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