Copper rose on Tuesday as sentiment around AI stocks recovered and demand strengthened in top consumer China, although a firmer dollar capped gains.
Benchmark three-month copper CMCU3 on the London Metal Exchange was up 1.1% at $14,487.50 a metric ton as of 1700 GMT, having hit a session-high of $14,490.50, its strongest since October 16.
Prices were finding support from rebounding AI stocks, with demand for the metal expected to benefit from AI infrastructure expansion, while supply remained constrained, particularly in China, said ING commodities strategist Ewa Manthey.
The surge in the Yangshan premium SMM-CUYP-CN — the closely watched gauge of China’s appetite for copper imports that hit a nearly 13-year high of $188 a ton on Tuesday — highlights the scramble for available metal, Manthey added.
“That tightness should continue to provide a floor under prices, although at these elevated levels we could see some resistance from price-sensitive demand.”
The cash LME copper contract last traded at a $199.50-a-ton premium over the three-month forward CMCU0-3, indicating near-term tightness. The premium earlier hit $206, the most since August 27.
LME copper stocks MCUSTX-TOTAL rose last week, but their heavy concentration in North America added to concerns about regional supply bottlenecks, while Shanghai Futures Exchange copper stocks CU-STX-SGH fell more than 25%.
“US inventory accumulation continues to limit the headline price, while tight ex-US availability and constrained concentrate supply preserve the underlying support,” Sucden Financial said in a note.
LME metals rose across the board on improving macroeconomic sentiment, although the dollar firmed ahead of a series of central bank meetings, making greenback-denominated metals more expensive for holders of other currencies.
Aluminium CMAL3 advanced by 1.5% to $3,085 per ton, touching a more than two-week peak after orders to withdraw 3,500 tons of metal from warehouses in Asia. Almost all the available aluminium in LME storage was of Russian origin.
Zinc CMZN3 was up 0.7% at $3,839.50, having notched its highest since September 30, and nickel CMNI3 added 0.4% to reach $15,615. Lead CMPB3 edged up 0.6% to $1,933.50 and touched a one-month high, while tin CMSN3 gained 0.9% to $51,405.
(Reporting by Tom Daly; additional reporting by Solomon Cefai; Editing by Sonia Cheema, Jochelle Mendonca, Harikrishnan Nair and Jonathan Ananda)
