LONDON — Copper prices vaulted to the highest level in six weeks on Friday as the dollar plunged and more rumors swirled about China loosening its strict COVID-19 measures.
Three-month copper on the London Metal Exchange (LME) shot up 4.2% to $7,875 a tonne in official open-outcry trading.
It climbed as much as 5.8%, touching its highest since Sept. 13 at $7,997.
A former Chinese disease control official on Friday said that China will soon make substantial changes to its COVID-19 policy but did not give the basis for that information.
Other unverified reports emerged this week that top metals consumer China would move closer to the rest of the world in removing coronavirus curbs.
“Our China economist is very skeptical about these rumors. He reckons that, with the low level of vaccination, the government is not going to move any time soon,” said Caroline Bain, chief commodities economist at Capital Economics.
The market also received a shot in the arm from a weaker dollar index, which extended losses after U.S. jobs data tempered expectations of fast-raising interest rates to fight inflation.
A softer dollar makes metals priced in the U.S. currency cheaper for buyers using other currencies.
Prices were also supported by the latest disruption to mine supply, with the huge Las Bambas copper mine in Peru saying on Thursday that it had begun to reduce operations because of recent blockades.
“Chile’s copper output was down 4% in September, so everything on the supply side is really supportive for prices and exchange stocks are also very low,” Bain said.
Copper stocks in LME warehouse dropped by 5,375 tonnes on Friday to 88,600 tonnes, the lowest in more than seven months.
Copper inventories in warehouses monitored by SHFE fell 6.9% week on week to 59,064 tonnes on Friday.
Among other metals, LME aluminum gained 2.3% in official activity to $2,316 a tonne, zinc climbed 4.2% to $2,834, lead added 0.9% to $2,013, nickel jumped 4.8% to $23,900 and tin advanced 3% to $18,290.
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(Reporting by Eric Onstad Additional reporting by Siyi Liu and Dominique Patton in Beijing Editing by David Goodman)