Another solid week for copper

By Glenn Dyer | More Articles by Glenn Dyer

Another week of solid gains for copper, with prices rising to two-year highs on Friday. The BHP approach to buy Anglo American is a new positive for the metal.

Prices reached $US10,000 a tonne on the London Metal Exchange. Ii New York, the Comex price touched $US4.61 a pound — the best in more than three years. Prices hit a record in Shanghai.

Analysts and traders said the rise was again backed by investment flows from funds and not from industry, where fears about a shortage of concentrates continues to worry metal users and transformers — especially in China.

But BHP’s (ASX:BHP) suggested $A60 billion bid for Anglo American — rightly perceived as a copper play — is now helping boost interest in the metal.

Three-month copper on the London Metal Exchange rose to $US9,971.50 and then eased back to $US9,865, while the most-traded June copper contract on the Shanghai Futures Exchange advanced 1.7% to 80,680 yuan a tonne ($US11,135.80).

Earlier in the session, LME copper climbed to as high as $US10,000 a tonne, its highest since April 2022, and SHFE copper hit a record high of 81,080 yuan.

Helping boost prices was news that Chile, the world’s biggest copper producing country, has revised downwards its outlook for production growth this year. Production is expected to reach 5.51 million tonnes, compared with the previous estimate of 5.63 million tonnes.

"Index funds, exchange-traded funds, etc, are attracting retail money into metals. Momentum-based buying is pulling them up; selling resistance remain low," said Sandeep Daga, a director at metals analysis company Metal Intelligence Centre.

"Copper needs to keep creeping up to avoid backlash from momentum traders. (It) is filled with the spirit of excitement, which is taking it far away from the reality," he added.

Reuters reported that Yangshan copper premium rebounded to $US2.5 a tonne after hitting zero for the first time on record, indicating a slight improvement in appetite to import copper into China.

However, the premium is close to none, compared to the $US67.50 at the beginning of the year. The slide in the premium has been driving by the collapse in TC/RC processing prices for copper concentrates.

Meanwhile SGX iron ore prices ended with a small gain of just over $US1 a tonne – the Friday close on the SGX platform was $US117.40, up from $US115.57 the previous Friday. 

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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