Copper extends recovery as global recession fears abate

5
Copper extends recovery as global recession fears abate

Author of the article:

Reuters

LONDON — Copper continued to rebound on Friday as fears of a global recession eased after strong U.S. jobs data and investors focused on low inventories and threats to supply.

Three-month copper on the London Metal Exchange (LME) climbed 1.7% to $7,856 a tonne by 1400 GMT, building on the previous session’s 0.7% gain.

U.S. Comex futures rose 1.7% to $3.54 a lb.

Copper has recovered from three days of losses early this week prompted by weak global factory data and flaring U.S.-China tensions after U.S. House of Representatives Speaker Nancy Pelosi’s visit to Taiwan.

Advertisement 2

The metal used in power and construction has shed 28% since touching a record peak of $10,845 in March.

“To produce a crash in prices, a global recession would have to be synchronized, but we’re not seeing that. Just Europe is in recession while China has been stabilizing,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.

Chinese authorities are pumping stimulus spending into the economy and launching metals-intensive infrastructure projects to lift economic growth.

U.S. data on Friday showed job growth unexpectedly accelerated in July, lifting the level of employment back to its pre-pandemic level, the strongest evidence yet that the economy was not in recession.

“The tightness of (metals) supply is much higher than two years ago, so my bet is that there’s the risk of a squeeze in the fourth quarter,” Torlizzi added.

Advertisement 3

Metals consumers who have been waiting for lower prices will scramble to restock when they realize prices have stabilized, he added.

Most LME inventories are at historically low levels. Copper stocks , at 128,600 tonnes, have shed nearly 30% since mid-May.

Prices of other metals were mostly firmer. LME aluminum climbed 1.4% to $2,437.50 a tonne, lead added 0.3% to $2,051.50 after touching its highest since June 21 and tin gained 0.3% to $24,610.

Nickel was unchanged at $22,210 while zinc slipped by 0.6% to $3,430.

For the top stories in metals and other news, click or (Reporting by Eric Onstad Editing by David Goodman and Susan Fenton)

Top Stories Newsletter logo

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300