Copper bounces on scarce supplies and robust risk appetite
Copper prices jumped on Wednesday on low inventories, healthy risk appetite and a brighter technical outlook.
Three-month copper on the London Metal Exchange had gained 1.5% to $9 633.50 a tonne by 10:00 GMT, having lost about 8% since October 18.
“We’ve had a very deep correction from the run-up in October and now it looks like we’re finally finding a plateau from where the market will stabilise,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“Risk appetite seen through the stock market remains pretty robust and the technical picture has improved with that bounce we’ve seen from the lows earlier this week.”
Global stock markets traded at fresh record-high levels on Wednesday ahead of a likely US central bank announcement that it will start cutting pandemic-era monetary stimulus.
An arbitrage window has also opened up between the LME and China, spurring Chinese buying, Hansen added.
The most-traded December copper contract on the Shanghai Futures Exchange closed up 2% at 71 350 yuan ($11,151.23) a tonne, following two straight weeks of declines.
