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Copper prices rose on Thursday after two days of losses, helped by tight supply of the metal and a pledge by the U.S. Federal Reserve to go slow on interest rate rises.
Global stock markets hit record highs after the Fed said it would trim its bond-buying programme but wait for more job growth before raising rates.
The Bank of England also kept interest rates on hold on Thursday, defying expectations of a rate rise.
Benchmark copper on the London Metal Exchange (LME) was up 1.1% at $9,565 a tonne in official trading.
Copper prices have climbed more than 20% this year after a 26% increase in 2020 but have largely trodden water since reaching an all-time peak of $10,747.50 in May.
Higher coal prices in China are supporting copper as they have raised the cost of producing the metal, said Gianclaudio Torlizzi at consultants T-Commodity. China is the biggest smelter of metals.
Torlizzi said he expected copper to rise as a global semiconductor shortage eases, global growth improves, supply remains tight and the Fed keeps monetary policy loose.
“Production costs have risen and that will create a higher floor for prices,” he said. “I see this as an opportunity to get long again.”
COPPER STOCKS: On-warrant inventories in LME registered warehouses have risen to 38,450 tonnes but remain close to historic lows, forcing traders to pay high premiums to get metal.
Visible stocks in China are also low.
EUROPE: German industrial orders rose less than expected in September and euro zone business growth slipped to a six-month low in October, data and a survey showed on Thursday.
ALUMINIUM: Expectations that Russia will remove taxes on aluminium exports and boost global supplies have triggered an inventory sell-off, slashing prices in the physical market in Europe and the United States.
METALS PRICES: Benchmark LME aluminium was up 0.3% at $2,664 a tonne, zinc was down 0.2% at $3,300.50, nickel rose 1.4% to $19,430, lead edged 0.1% higher to reach $2,376 and tin was flat at $37,095.