Copper continues to hold its momentum. Let's hope demand holds and that the higher grades that we will be mining translates into some trading volume interest. It would be great if we got the permitting news from Florence. I am not as optimistic about New Prosperity moving ahead any time soon. Any project that involves First Nation dissent, seems to have "when Hell freezes over" timelines.
Traders bullish on copper as China data signal better demand.
Copper is at last getting a moment in the sun. Prices are heading for the biggest weekly gain in two months as the metal that’s lagged far behind its peers this year gets a boost from signs that demand may strengthen in China, the biggest consumer.
The metal for delivery in three months traded at $4 764 a metric ton on the London Metal Exchange at 10:04am. from Thursday’s $4 781, the highest close since August 19. It’s 2.8% higher this week, the most since the period to July 15. By contrast, zinc — the top metals performer of 2016 — is on course for its first back-to-back weekly drop since January.
Copper analysts and traders remain bullish on the near-term outlook for prices after a slew of Chinese data fueled speculation demand will improve, according to a Bloomberg survey. Figures this week showed new credit surpassed estimates after readings for factory output, investment and retail sales also exceeded expectations. Last week, Bank of China International said the time’s coming to bet on gains for copper while shorting zinc.
“I think the Chinese figures may continue to be good for a while following so many stimulus and easing fiscal and monetary policies in the past,” which is supportive for the copper price, Richard Fu, the Asia and Pacific chief at Amalgamated Metal Trading in London, said by e-mail. “It might be on the way up to close to the $5 000 level.”
Copper has advanced just 1.6% in 2016, the least among the six main base metals, amid speculation that growth in supply is topping demand to spur a surplus.
HSBC Holdings said in a September 15 report that copper will remain in surplus until 2018 as oversupply is weighing on prices. It expects copper to average $4 771 this year and at $4 960 a ton in 2017. The copper glut will probably last another two or three years, Antofagasta’s head Ivan Arriagada said in an interview this week.
Zinc has rallied 39% this year amid forecasts for a worldwide deficit following mine depletions, and after some producers including Glencore cut supply. The price — which rose to $2 372 a ton earlier this month, the highest since May 2015 — was at $2 220.50 a ton.
Global copper stockpiles tracked by the LME fell for a fourth day, the longest declining streak since June 22. Among other metals on the LME, aluminum rose as much as 1.2 percent to $1 590 a ton; aluminum “is building the bottom around current level,” Fu said. Financial markets in mainland China, Taiwan, Hong Kong, South Korea and Malaysia are shut for holidays on Friday.
© 2016 Bloomberg