Onome Amuge

Copper gained on Monday as investor sentiment brightened following signs that the US government shutdown may soon end and fresh data indicated that deflationary pressures in China, the world’s largest consumer of industrial metals, are easing.

Benchmark three-month copper on the London Metal Exchange (LME) rose 0.9 per cent to $10,815 a tonne in official trading, extending this year’s rally to 23 per cent after hitting a record $11,200 on October 29. Industrial metals strengthened in step with global equities and bonds after the US Senate advanced legislation to reopen the federal government following weeks of political deadlock.

“That’s sending a cheerful signal through risk markets. Industrial metals are feeling the impact of that as well,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Hansen added that a resolution to the shutdown could bolster expectations of a US interest rate cut following a run of weaker economic data. “The key question for metals is whether a rate cut would offset potential near-term risks to growth,” he said.

On the Shanghai Futures Exchange, the most-traded copper contract climbed 0.6 per cent to ¥86,480 ($12,141) per tonne in daytime trade. Analysts pointed to signs of stabilisation in Chinese prices, with producer price deflation slowing and consumer inflation turning positive in October.

“Copper demand from end-users has stayed resilient. Even though buyers were cautious when prices were high, many orders have picked up again as prices have eased,” analysts at GF Futures said in a note. 

Beyond copper, gains were recorded across the industrial metals landscape. Lead was up 0.7 per cent to $2,061.50 a tonne, its highest level in four months, after LME inventories fell by 21 per cent over the past month, spurring speculative buying.

Aluminium advanced 1.2 per cent to $2,882.50, while zinc gained 1.5 per cent to $3,101, nickel added 0.3 per cent to $15,105, and tin increased 1 per cent to $36,195 per tonne.