Copper prices up on bargain hunting

Copper rose more than 1 percent on Friday, leading other base metals higher as recent sharp falls prompted some bargain hunting among investors encouraged by gains in oil and equities. Global equities are ending their last full week of 2014 on a high after Wall Street boasted its biggest two-day advance since late 2011 amid relief the Federal Reserve appears in no rush to withdraw stimulus from the US economy.
The move revived risk sentiment, which was also boosted by a stabilisation in battered oil prices and the Russian rouble. "We're getting bargain hunting and short covering as we approach year end. Investors are taking advantage of weaker prices. Definitely the rally in global equities would be supportive," said William Adams, head of research at Fast Markets.
"Weaker oil prices will (still) weigh on metals but it doesn't run in a straight line and we've become oversold in the short term." Benchmark three-month copper on the London Metal Exchange closed up 1.3 percent at $6,400 a tonne, but still lost 1.4 percent this week. For the year, copper is down some 13 percent on worries the market is heading towards a surplus after several years of deficit, and on slowing economic growth in China, which consumes nearly half the world's copper.
Barrick Gold Corp said it would suspend operations at its Lumwana copper mine in Zambia following the passage of legislation that raises the royalty rate on open-pit mining. Lumwana produced 117,000 tonnes of copper in 2013, according to Barrick's website. In other metals, nickel closed down 0.3 percent at $15,600 a tonne. China's ferro-nickel imports will likely surge over the next two years as more of its Indonesian projects come online, while Beijing's move to remove a tax on overseas purchases of the commodity will also boost arrivals.
The nickel market was in surplus in the January-to-October 2014 period, with production exceeding apparent demand by 148,000 tonnes, according to WBMS. Aluminium lost 0.3 percent to close at $1,906.5 a tonne, zinc closed up 2.5 percent at $2,180 a tonne, lead closed up 1.3 percent at $1,879 a tonne while tin closed up 0.4 percent at $19,175 a tonne.