LONDON- Copper prices hit their highest levels in three months on Friday and were heading for their biggest weekly gain since September, as the return of top metals consumer China after the Lunar New Year holidays eased fears about trade tensions.
Benchmark three-month copper on the London Metal Exchange climbed 1.6 percent to $9,422 a metric ton by 1700 GMT, having hit its highest since November 8 at $9,507. The contract is up 4.1 percent this week.
“It is China which is really fueling the rally in the past 48 hours since their reopening,” said Alastair Munro, senior base metals strategist EMEA, at broker Marex.
The most active copper contract on the Shanghai Futures Exchange, which reopened on Wednesday, gained 1.5 percent
US President Donald Trump delayed imposing 25 percent tariffs on imports from Canada and Mexico but slapped an additional 10 percent tariff on all Chinese imports this week.
Beijing retaliated by announcing tariffs up to 15 percent on some US imports starting on February 10, leaving room for potential negotiations.
The markets are waiting for a call between Trump and Chinese President Xi Jinping. They will speak as soon as this week, Trump’s spokeswoman said on Monday.
US Comex copper futures jumped 2.6 percent to $4.58 a lb, a premium over the LME price of $659 per ton as investors seek to price in the risks related to US tariff plans.
Copper inventories in warehouses monitored by SHFE saw a seasonal 81.5 percent jump from the last release on January 24 to the highest level in almost five months, SHFE data showed on Friday. Zinc inventories jumped by 81.8 percent.
