Copper price hits $7,000 as China rebounds

London  — Copper leapt above $7,000 a tonne on Wednesday for the first time since June 2018, helped by expectations of healthy demand in China, a strengthening yuan and hopes for a US stimulus deal. Strikes at mines in Chile also played a role.

Benchmark copper on the London Metal Exchange (LME) was up 1.4% at $6,998.50 a tonne after earlier reaching $7,034 on Wednesday.

The industrial metal used in the power and construction sectors has risen 60% from a low in March as China, which consumes around half the world’s copper, rebounded from the coronavirus shock.

Adding to the bullish mood were expectations of bigger stimulus if Joe Biden wins the US presidency, and more Chinese demand after a meeting of China’s leaders next week to discuss a five-year development plan, said ING analyst Wenyu Yao. “In the short term, the market could remain well supported,” she said.

Referring to recent labour strikes in the world’s biggest copper producing country, commodities broker Anna Stablum  at Marex Spectron said: “Throw in some potential supply disruptions in Chile, (you have a) nice mix to go higher.

“As the situation deteriorates in Europe and the US with more coronavirus cases, there will be more stimulus needed and this is helping commodities higher,” she said.

Reuters