Shanghai copper posts best week in nearly 2 years on signs of China demand recovery
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Beijing
A STRONG rally in Friday afternoon trade pushed Shanghai copper prices to a more than a three-week high and their biggest weekly gain in 22 months, on signs of a recovery in demand from top consumer China and tightening supply across the globe.
The metal rose 3.7 per cent for the week, recording its third straight weekly gain as well as its biggest jump since the week ended June 8, 2018.
However, it was down 17.1 per cent for the year, weighed down by the novel coronavirus outbreak.
Demand in China fell first due to the virus "but infrastructure projects there are now being pulled forward, factories are restarting, construction activity is picking up, traffic congestion is increasing and pollution is increasing," brokerage Jefferies said in a note. "This all suggests that demand in China is clearly improving from a very low base," it said, adding that the early demand shock could now switch to "a more substantial supply shock".
A total of 2.4 million tonnes of annual copper capacity - or 12 per cent of global mine supply - has been temporarily shut due to virus-related curbs, Jefferies estimates.
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The London Metal Exchange was closed on Friday and will remain shut on April 13, Easter Monday.
The most-traded May ShFE copper contract rose as much as 2.6 per cent in the afternoon session to 41,890 yuan (S$8,417) a tonne, its highest since March 17, before closing at 41,790 yuan.
China's copper cathode output rose 2.6 per cent month-on-month in March, research house Antaike said.
ShFE base metals were higher across the board, with nickel and tin tracking Thursday's gains in London to their highest levels since mid-March.
They closed up 2.3 per cent and 3.4 per cent, respectively.
Aluminium ended up 1.8 per cent after touching its highest since March 20, while zinc closed up 0.3 per cent and lead added one per cent.
Copper inventories in ShFE warehouses CU-STX-SGH fell 4.4 per cent from the previous week to 317,928 tonnes, the exchange said. REUTERS
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