Copper’s outright price on the LME was recently trading at $6,352 per tonne, climbing from a morning low of $6,246 per tonne, while turnover was strong at more than 10,000 lots exchanged as at 10.15am London time.
Prompting the move higher, continued uncertainty over copper production out of Chile spurred an initial push above $6,000 per tonne last week, while a crimp in the metal’s supply also led to a backwardation in LME copper’s forward curve - the first since May 2019.
LME copper’s benchmark cash/three-month spread was recently seen at a backwardation of $0.50 per tonne.
Meanwhile, a fresh cancellation of some 4,000 tonnes out of LME-registered warehouses in Rotterdam has seen some 9,000 tonnes removed from the region this week, taking total LME on-warrant copper stocks down to 90,400 tonnes.
“It seems that the markets in general are a mix of conflicting views, one moment bullish, then back to coronavirus-fears bearish,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.
“It would seem to be, if you’re bullish buy, and bearish sell, but cover whatever you do with options to manage your risk exposure or if not have very deep pockets to ride out adverse moves. We live through very interesting times at the moment,” he added.
Elsewhere in the complex, the three-month zinc price was well supported above nearby resistance levels, recently trading at $2,153 per tonne, while turnover was also strong at more than 5,000 lots exchanged as at 10.25am London time.
Supporting the move higher, a fresh cancellation this morning saw 15,050 tonnes booked predominantly out of LME-registered warehouses in the United States, with some 3,350 tonnes freshly canceled in Baltimore, and 11,600 tonnes freshly canceled in New Orleans.
Total LME on-warrant zinc stocks now stand at 99,500 tonnes, while the metal’s cash/three-month spread was recently seen in a contango of $13.90 per tonne.
- Elsewhere, the three-month aluminium price was similarly higher over the morning, recently trading at $1,689.50 per tonne, with higher price action coming after a fresh cancellation of 54,125 tonnes, which was booked mostly out of warehouses in Port Klang.
- In other commodities, Brent crude oil futures were down by 0.16%, recently trading at $43.26 per barrel.
- West Texas Intermediate (WTI) was recently at $40.83 per barrel, a decline of 0.54%.
- In economic data from China this morning, the country’s consumer price index (CPI) rose by 2.5% year on year in June, which was in line with expectations, while its producer price index (PPI) fell by 3% over the same comparison - better than the 3.2% decline that had been projected.
- Later, the US will be releasing data on unemployment claims.