Copper bounces on scarce supplies and robust risk appetite
By Eric Onstad
LONDON, Nov 3 (Reuters) - Copper prices jumped on Wednesday on low inventories, healthy risk appetite and a brighter technical outlook.
Three-month copper on the London Metal Exchange had gained 1.5% to $9,633.50 a tonne by 1000 GMT, having lost about 8% since Oct. 18.
"We've had a very deep correction from the run-up in October and now it looks like we're finally finding a plateau from where the market will stabilise," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"Risk appetite seen through the stock market remains pretty robust and the technical picture has improved with that bounce we've seen from the lows earlier this week."
Global stock markets traded at fresh record-high levels on Wednesday ahead of a likely U.S central bank announcement that it will start cutting pandemic-era monetary stimulus.
An arbitrage window has also opened up between the LME and China, spurring Chinese buying, Hansen added.
The most-traded December copper contract on the Shanghai Futures Exchange closed up 2% at 71,350 yuan ($11,151.23) a tonne, following two straight weeks of declines.
"Inventories are still dwindling, so this downwards flat price momentum too has its limits," a Singapore-based metals trader said.
* On-warrant LME copper inventories <MCUSTX-TOTAL> rebounded by 19% to 37,525 tonnes, daily LME data showed on Wednesday, but they are still down 84% since late August.
* The LME cash copper premium over the three-month contract <MCU0-3> was at $275 a tonne, indicating tight nearby supplies.
* A rural community in Peru will likely lift its blockade of the country's largest copper mine Antamina on Wednesday after protests forced miners to suspend operations, the Peruvian Ministry of Energy and Mines said in a tweet.
* LME cash nickel was last at a $110-a-tonne premium over the three-month contract <MNI0-3>, suggesting tightness in nearby supplies, as inventories <MNISTX-TOTAL> fell to their lowest since December 2019 at 139,878 tonnes.
* LME aluminium advanced 1.5% to $2,733.50 a tonne, nickel rose 0.7% to $19,740, lead added 1.1% to $2,388.50, tin climbed 1.8% to $37,300, but zinc slipped 0.3% to $3,333.
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($1 = 6.3984 yuan) (Additional reporting by Mai Nguyen in Hanoi and Min Zhang in Beijing; Editing by Shailesh Kuber)
