METALS-Copper hits six-week peak on rumours about China easing COVID curbs

Credit: REUTERS/Nguyen Huy Kham

By Eric Onstad

LONDON, Nov 4 (Reuters) - Copper prices vaulted to the highest level in six weeks on Friday as more rumours swirled about China loosening its strict COVID-19 measures while supply concerns still lingered.

Three-month copper CMCU3 on the London Metal Exchange (LME) shot up 4.4% to $7,895 a tonne by 1100 GMT after touching its highest since Sept. 13 at $7,918.

A former Chinese disease control official on Friday said that China will soon make substantial changes to its COVID-19 policy but did not give the basis for that information.

Other unverified reports emerged this week that top metals consumer China would move closer to the rest of the world in removing coronavirus curbs.

"Our China economist is very sceptical about these rumours. He reckons that, with the low level of vaccination, the government is not going to move any time soon," said Caroline Bain, chief commodities economist at Capital Economics.

Prices were also supported by the latest disruption to mine supply, with the huge Las Bambas copper mine in Peru saying on Thursday that it had begun to reduce operations because of recent blockades.

"Chile's copper output was down 4% in September, so everything on the supply side is really supportive for prices and exchange stocks are also very low," Bain said.

Copper stocks in LME warehouse dropped by 5,375 tonnes on Friday to 88,600 tonnes, the lowest in more than seven months. MCUSTX-TOTAL

Copper inventories in warehouses monitored by SHFE fell 6.9% week on week to 59,064 tonnes on Friday.

Traders will eye the U.S. payrolls report, due at 1230 GMT, with any upside surprise likely to reinforce the Fed's hawkish outlook, analysts said.

Economists polled by Reuters expect payrolls to have increased by 200,000 jobs in October.

Among other metals, LME aluminium CMAL3 gained 2.3% to $2,317 a tonne, zinc CMZN3 jumped 4.6% to $2,845, lead CMPB3 added 0.6% to $2,007, nickel CMNI3 climbed 3.1% to $23,500 and tin CMSN3 was up 2.1% at $18,130.

For the top stories in metals and other news, click TOP/MTL or MET/L

(Reporting by Eric Onstad Additional reporting by Siyi Liu and Dominique Patton in Beijing Editing by David Goodman )

((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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