Copper prices hit their highest level in two weeks on Tuesday as optimism over new infrastructure projects in top metals consumer China and concerns about mine supply led speculators to buy back more short positions.
* Three-month copper on the London Metal Exchange rose 2.3% to $7,650.50 a tonne by 1045 GMT, the highest level since July 12 and the third straight day of gains.
* Copper has risen nearly 10% since hitting a 20-month low on July 15, largely on hopes of a recovery in China after COVID-19 lockdowns depressed an already sluggish economy.
* “This week, China’s banks kicked off the first round of new investment projects,” said Xiao Fu, head of commodity market strategy at Bank of China International.
* “So we could see an acceleration of infrastructure projects, which appears to be stabilizing market sentiment and prompting more short-covering.”
* Confidence was also helped by Monday’s news that China plans to launch a $44 billion real estate fund to help property developers resolve a crippling debt crisis.
* The most-traded September copper contract on the Shanghai Futures Exchange closed 3% higher at 58,890 yuan ($8,718.24) a tonne.
* Prices were also buoyed by supply concerns as some miners struggled with production.
* Chinese miner MMG Ltd said on Monday it had suspended its copper production targets for the year, while last week Vale SA and Antofagasta Plc also cut copper production forecasts.
* In other LME metals, aluminum was up 1% at $2,433.50 a tonne, nickel was up 0.8% at $22,395, zinc was up 2.4% at $3,058, lead added a 0.3% to $2,010.50 and tin gained 1.5% to $25,000.