METALS-Copper rises towards two-year high as inventories fall, shares gain

Beckett Bronze manufactures bronze bearings, bronze bushings, and bronze bars. Custom made cast bronze bearings, bushings, and bars are made from over 50 alloys in our own foundry.


LONDON, Aug 26 (Reuters) – Copper prices pushed towards a two-year high reached earlier this month on Wednesday as inventories in the London Metal Exchange (LME) system fell to the lowest in 14 years and stock markets rose.

Benchmark copper on the LME was up 0.8% at $6,584 a tonne in official trading, approaching a high of $6,707 reached on Aug. 19.

Fuelling the gains were a reaffirmation by U.S. and Chinese officials of their commitment to a Phase 1 trade deal, and hopes for more central bank stimulus measures ahead of a major speech by the U.S. Federal Reserve chairman.

“There is more bullishness about the state of the global economy,” said WisdomTree analyst Nitesh Shah, adding that prices will likely increase further.

Expectations that inflation will rise are also helping metals, which as hard assets can serve as an inflation hedge, he said.

STOCKS: Copper inventories in LME-registered warehouses at 92,025 tonnes are the lowest since 2006 and down from more than 280,000 tonnes in May. MCUSTX-TOTAL

SPREAD/WARRANTS: Cash copper is at a premium to later-dated contracts, pointing to tight nearby supply. Adding to concerns over availability, one entity controls between 80% and 89% of LME copper warrants. MCUT-0=LX MCU0-3 <0#LME-WHL>

CHINA DEMAND: Citibank analysts said Chinese year-on-year copper demand growth in July was the highest since February 2017.

YUAN: The yuan rose to its strongest against the dollar since January, making metals cheaper for Chinese buyers.

PREMIUMS/STOCKS: Chinese Yangshan copper import premiums fell to $70 from a high of $113.50 in May, while stockpiles in Shanghai Futures Exchange warehouses and bonded warehouses have risen since June. SMM-CUYP-CN CU-STX-SGH SMM-CUR-BON

GRASBERG: Protests at Indonesia’s Grasberg, the world’s second-largest copper mine, continued for a third day, disrupting operations.

NICKEL: PT Vale Indonesia raised its output target for 2020 to 73,700 tonnes of nickel matte from 71,000 tonnes.

OTHER METALS: LME aluminium was up 0.2% at $1,779 a tonne, zinc fell 0.1% to $2,480.50, nickel gained 0.7% to $15,077, lead added 0.1% to $1,994.50, and tin was up 0.9% at $17,517. (Reporting by Peter Hobson Additional reporting by Mai Nguyen Editing by Kirsten Donovan and David Holmes)


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