METALS-Copper prices lifted by inventory squeeze


By Zandi Shabalala

LONDON, Feb 8 (Reuters) - Copper prices rose on Monday, underpinned by thinning inventories that pointed to higher demand for the industrial metal and by optimism over a massive U.S. COVID-19 aid package.

Three-month copper CMCU3 on the London Metal Exchange (LME) gained 1% to $7,989 a tonne by 1136 GMT.

"Inventories are still quite low on exchanges. That gives good indication that manufacturing demand for copper is present and that its not just a speculative story," said Nitesh Shah, an analyst at investment manager WisdomTree.

SPREADS: The premium for nearby metal over the three-month price has jumped to its highest since September 2020, indicating concerns over immediately available supply. CMCU0-3

INVENTORIES: Stocks of copper across the LME, Comex and ShFE markets are at multi-year lows. This is despite the approaching Lunar New Year holiday in top consumer China, when demand is seasonally low. CU-STX-SGH

Meanwhile, ShFE stocks of metals including zinc, tin and aluminium have climbed.

"Recent stock builds across the ferrous and LME landscape are a seasonal pattern ahead of Chinese New Year, although this year the increases are actually lighter than is normally seen, painting a picture of remaining strong demand," said Alastair Munro at broker Marex Spectron.

CHINA PREMIUMS: Premiums to import cathodes from bonded warehouses into China SMM-CUYP-CN have surged 59% since November to six-month highs of $73 a tonne, underscoring strong demand for physical metal.

U.S. STIMULUS: Hopes for the passage of a $1.9 trillion COVID-19 aid package in the United States rose after weak jobs data showed the U.S. labour market recovery is stalling.

China's new bank loans could surge to a record high in January, a Reuters poll showed, though 2021 credit growth could be constrained by some marginal tightening of monetary policy.

OTHER METALS: LME aluminium CMAL3 rose 0.6% to $2,028 a tonne, zinc CMZN3 gained 0.5% to $2,678, lead CMPB3 added 0.8% to $2,068, tin CMSN3 advanced 0.2% to $23,160 and nickel CMNI3 was up 0.3% at $18,085.

(Reporting by Zandi Shabalala Additional reporting by Mai Nguyen Editing by David Goodman )


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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