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LONDON — Copper prices hit their highest in more than six months on Monday, driven higher by an improving demand outlook after top consumer China reopened its borders, with a lower dollar reinforcing positive sentiment.
Fund managers tracking commodity indices and rebalancing their holdings to target weights were also behind gains in aluminum, zinc and lead.
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Benchmark copper had gained 2.7%% to $8,826 a tonne at 1517 GMT after hitting $8,846.5, its highest since June 22.
After three years, China opened sea and land crossings with Hong Kong and ended a requirement for incoming travelers to quarantine, dismantling a final pillar of a zero-COVID policy that had cut the country off from the rest of the world.
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China’s reopening is adding fuel to the fire that there will be a demand pick-up at a time of low inventories, one metals trader said, adding that a weaker U.S. currency would also buoy demand for dollar-priced commodities.
Stocks of aluminum
Zinc stocks
Canceled lead warrants — metal earmarked for delivery — are at 64%, indicating more lead is due to leave LME warrant.
For aluminum and zinc, canceled warrants stand at 52% and 46% respectively.
Commodity index rebalancing also resulted in selling of the LME’s nickel contract after it rose 44% last year.
Nickel was down 1.7% at $27,605 a tonne. It fell 6.5% last week, with traders citing selling by speculators ahead of the rebalancing.
Zinc was up 6.4% at $3,218 a tonne, from an earlier $3,244, the highest since Dec. 15 as purchases for index reweighting pushed prices up through the 21- and 100-day moving averages triggering further buying.
In other metals, aluminum was up 5.2% at $2,416 a tonne, lead advanced 4.3% to $2,295 and tin was up 2.4% at $25,875. (Reporting by Pratima Desai Additional reporting by Mai Nguyen Editing by Jason Neely, David Goodman and David Evans)
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