Copper and zinc rose to the highest in five months as industrial metals rallied on speculation that demand will rebound and as equities recovered worldwide. Copper gained for a fifth day, the longest run since February 2008, as governments’ efforts to revive growth pushed the MSCI World Index of global equities to its highest in almost two months.
“It looks like an equity-driven rally,” Marc Elliott, an analyst at London-based Fairfax IS, said by phone. “The equity markets are up quite strongly and if they continue to go that way that will hold the prices up.”
Copper for three-month delivery on the London Metal Exchange climbed as much as 3.7 per cent to $4,459 a tonne, the highest since October 30. It traded at $4,380.
“On the charts the metals look strong,” William Adams, an analyst at Basemetals.com, wrote in a note. “Joining the breakouts in copper and zinc, aluminum has cleared $1,475, while lead, nickel and tin are running up to tackle resistance.”
Three-month zinc rose as much as 2.2 per cent to $1,400 a tonne, the highest since October 15, before trading at $1,390. Nickel jumped $120, or 1.1 per cent, to $11,020 a ton.
Industrial metals’ gain was gold’s loss. The precious metal in London dropped to its lowest in more than two months to $874.08 an ounce as investors’ risk appetite increased.
“The weakness in gold suggests investors are taking profits and are lightening up on safe-haven investm-ents,” Adams said. “And with equities pushing higher, it does all suggest confidence is on the rise.”
Copper inventories tallied by the LME rose 0.5 per cent to 504,825 tonnes today, with metal earmarked for delivery almost doubling to 50,525 tonnes or 10 per cent of total stockpiles. Stockpiles monitored by the Shanghai Futures Exchange dropped for a fourth week to 22,908 tonnes last week, the lowest since January 22, according to exchange data.
The rally in copper prices, up 42 per cent since the beginning of the year, was “premature,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said in a report.
Hedge-fund managers and other large speculators increased their net-short position, betting on falling prices, in New York copper futures in the week ended March 31, according to US Commodity Futures Trading Commission data.
Diego Hernandez, president of BHP Billiton Ltd.’s base- metals division, said April 2 that tight scrap supplies, feeding about 40 per cent of the total raw materials to the world’s copper smelters, would keep copper prices at $1.60 a pound ($3,527 a tonne).
Aluminum for three-month delivery rose 1.8 per cent to $1,507. Lead gained 1 per cent to $1,338 a tonne. Tin fell 1.4 per cent to $10,925 a tonne.
