Strong factory data pushes copper to new 7-year high
1 min read 01 Dec 2020, 08:21 PM ISTFactory activity in China, the biggest metals user, accelerated at the fastest pace in a decade after touching $7,723Benchmark copper on the London Metal Exchange (LME) was 1.8% higher at $7,715.50 a tonne
PremiumCopper prices on Tuesday hit their highest since 2013 as data showed manufacturing expanding rapidly in Europe and Asia in November and coronavirus vaccines turned investors increasingly bullish about the economic outlook.
Factory activity in China, the biggest metals user, accelerated at the fastest pace in a decade.
Benchmark copper on the London Metal Exchange (LME) was 1.8% higher at $7,715.50 a tonne at 1407 GMT after touching $7,723.
Global share markets rose and the US dollar weakened. LME aluminium hit a two-year high of $2,067 a tonne before slipping to $2,063.50, up 0.9%.
REBOUND: Copper has rebounded from a low of $4,371 in March -- and has surged by around $1,000 just in the past four weeks -- as governments pumped money into markets and speculators bought into the rally.
POSITIONING: Speculators' net long in LME copper is equal to 24% of open contacts, the highest since November 2017, brokers Marex Spectron said.
GOLDMAN: Analysts at Goldman Sachs said tight supplies meant copper was in a structural bull market and could rise to $9,500 within a year and record highs above $10,000 in 2022.
TOO BULLISH: "We are aiming for a $8,200 short term target," said Gianclaudio Torlizzi, a partner at consultants T-Commodity.
"The upside has been justified by the break above resistance at $7,350. That prompted funds to go long and shorts to cover, giving some fuel to the rally," he said.
But Goldman is too bullish and copper is likely to be volatile and peak in the first quarter of next year, he said, adding that, for now, "every dip has to be bought".
CHINA PREMIUMS: Yangshan copper import premiums rose to $56 a tonne from $46 in mid-October, pointing to higher Chinese demand for overseas metal.
VACCINES: Pfizer and Moderna are applying for authorization of their COVID-19 vaccines.
LUNDIN: Canadian miner Lundin Mining Corp said its 2021 copper production would increase 25% to between 275,000 tonnes and 299,000 tonnes and its zinc output would also rise.
OTHER METALS: LME zinc was down 0.3% at $2,798 a tonne, nickel was 1.1% higher at $16,210, lead was up 0.9% $2,089.50 and tin gained 0.9% to $18,790.
This story has been published from a wire agency feed without modifications to the text.
