Copper soars over 4% at close
Copper futures closed much higher in London on Thursday, boosted by a rally in the Chinese stock market that eased market fears about the state of the country's economy and sent commodities higher across the board after this week's sell off.
The London Metal Exchange's three-month copper contract was up 4.2 per cent at $US5,140 a metric tonne at the PM kerb close, an eight-day high.
That came after the embattled Shanghai Composite Index closed up 5.3 per cent, and the US stock market broke a six-day losing streak Wednesday to register its biggest one-day gain in almost four years. According to analysts, these moves into equity assets supported a broader move into other so-called risk assets, like oil and copper.
"Some confidence returned to the markets today and the price recovery continued across stock markets and commodities," wrote Liz Grant at Sucden Financial in a note.
A rebound in crude oil prices also lent copper prices a helping hand, said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago. The Brent Crude benchmark was trading up by almost 8 per cent in afternoon trading in Europe, while among metals, all bar gold were higher.
"Copper is getting some spillover from other markets," Mr Haberkorn said, adding that some investors were looking at copper as a bargain with prices still near six-year lows.
Looking ahead, copper prices aren't yet out of the woods as recent measures by China's central bank to boost liquidity have failed to completely dispel the pessimism surrounding the Chinese economy.
"With investors not convinced that China's stimulus measures will rejuvenate demand, commodities are likely to remain under pressure," an ANZ report said.
China consumes more than 45 per cent of the metal. As a result, its economy often has an outsize impact on prices. Recent investor concerns about the health of its economy following a string of governmental measures saw prices dip to multi-year lows.
Among the other base metals, aluminium closed up 1.4 per cent at $1,553.50 a tonne, zinc closed up 3 per cent at $US1,752 a tonne, nickel closed up 5.1 per cent at $US10,060 a tonne, lead closed up 1.8 per cent at $US1,678 a tonne and tin closed down 0.4 per cent at $US13,890 a tonne.
Copper is the Indicator of many things positive,
No Rate rise and some QE in the US looks more likely.
CYY has more copper drilling results flowing for the next few weeks. Cu price spike is very timely for them.