Copper at 3-wk high on economic optimism

Copper hit a three-week high today as last week's strong US report helped fuel hopes that the world's largest economy will spur global growth, and as copper stocks trended lower. The better-than-forecast increase in US job hirings in April, which pushed the unemployment rate to a four-year low, has come as copper stocks fall in both Shanghai and on the London Metal Exchange.

Latest data showed Shanghai stocks at 213,782 tonnes, their lowest since late February, while LME stocks are at 604,600, their lowest since early April, having hit their highest in nearly a decade in late April. Three-month LME copper was up 0.56 per cent at $7,305.75 a tonne by 0917 GMT. It hit a session high of $7,374, its loftiest since April 15. Copper rose more than six per cent on Friday when the US jobs numbers were released.

In other markets, world shares rose near a five-year high on growth optimism spurred by the US jobs report, and helped also by the European Central Bank's readiness to push its key deposit rate into negative territory if needed.  LME copper has risen by seven per cent in the last two trading sessions, but remains down nearly eight per cent for the year.  Last month it hit its lowest in a year and a half last month following weak growth data from China.  Despite copper's recent price gains, ANZ analysts said they expect commodity markets to consolidate in May, notwithstanding the expectation of stronger seasonal demand.

Aluminium edged up 0.03 per cent to $1,890.75 a tonne, while stainless-steel ingredient nickel fell 0.76 per cent to $15,085 a tonne.

“We think the aluminium and nickel markets look best placed for relief rallies. A substantial 45 per cent of global nickel producers and an astonishing 64 per cent of global aluminium producers are not making money at current spot prices,” said ANZ. In other metals, tin fell 0.49 per cent to $20,350 a tonne, zinc, edged up 0.03 per cent to $1,885.50, while lead rose 0.38 per cent to $2,045.75.