Copper prices rose on Monday as the risk-on sentiment spilled over from the equities market, reinforced by optimism over economic recovery after top consumer China reported no new locally acquired COVID-19 cases for the first time since July.
Asian shares bounced as a wave of bargain hunting swept beaten-down markets and China reported no new COVID-19 cases, offering signs that the current outbreak may be tapering off soon.
Surging novel coronavirus cases due to the highly transmissible Delta variant, slowing China growth and fear of U.S. policy tightening this year have weighed on base metals, with copper hitting its lowest in more than four months last week.
Three-month copper on the London Metal Exchange CMCU3 was up 0.8% at $9,106.50 a tonne, as of 0609 GMT, while the most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 advanced 1.8% to 67,760 yuan ($10,436.01) a tonne.
Metals are supported by a broader rise in U.S. and Asian equities, but the trading volumes are “very thin across the board suggesting that it is pretty much algorithms at play,” director Malcolm Freeman at broker Kingdom Futures said in a note.
Copper prices were also boosted by rising supply threat in Chile’s El Teniente mine, where a majority of the five workers’ unions on Thursday rejected a labour contract offered prior to the official negotiating period.
LME nickel CMNI3 climbed 1.9% to $18,815 a tonne and aluminium CMAL3 rose 1.2% to $2,577 a tonne. ShFE aluminium SAFcv1 advanced 1.8% to 20,335 yuan a tonne and ShFE nickel SNIcv1 increased 1.4% to 141,760 yuan a tonne.
Meanwhile, a jump in the ferrous sector supported nickel, an input material of stainless steel, said a metals trader.
FUNDAMENTALS
* The global world refined copper market showed a 2,000 tonnes surplus in May, compared with 86,000 tonnes deficit in April, the International Copper Study Group said.
($1 = 6.4929 yuan)
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Uttaresh.V and Sherry Jacob-Phillips)