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Copper prices rose on Wednesday for a fourth day, helped by signs of strong demand in top consumer China and a steep decline in inventories available in the London Metal Exchange (LME) warehouse system.
Benchmark copper on the LME was 0.4% higher at $9,409 a tonne at 1059 GMT, up from last week’s low of $8,740.
Copper is used in power and construction and many analysts foresee strong demand as fossil fuels give way to electrification. Prices hit a record high of $10,747.50 in May.
“I cannot see a real reason to be bearish … there is room to break the record,” said Gianclaudio Torlizzi at consultants T-Commodity.
High inflation expectations, falling inventories, higher Chinese import premiums and a positive demand outlook are all supporting prices, he said.
Copper has also held above its 200-day moving average at $8,880, improving its technical picture, he added.
PREMIUMS: Chinese Yangshan copper import premiums have risen above $100 a tonne from as low as $21 in June, suggesting stronger demand for overseas metal.
STOCKS: On-warrant copper inventories in LME-registered warehouses fell to 178,125 tonnes from almost 240,000 tonnes a week ago.
SPREAD: Cash copper on the LME has flipped to a premium against the three-month contract from a roughly $30 discount in mid-August. A premium indicates tighter supply of quickly deliverable metal.
INFRASTRUCTURE: The U.S. House of Representatives voted to advance key parts of President Joe Biden’s agenda including an infrastructure plan.
GERMANY: German business morale fell for the second month running in August.
STRIKE: Chilean state-owned miner Codelco, the world’s largest copper producer, said it reached agreement on a new contract with supervisors at its Andina mine.
MARKETS: European shares clung near record highs and the dollar strengthened slightly.
OTHER METALS: LME aluminum was up 0.7% at $2,632.50 a tonne, zinc rose 0.9% to $3,045, nickel added 0.8% to $19,235, lead gained 1.5% to $2,327.50 and tin was up 0.5% at $33,000.
Source: Reuters