LONDON : Global copper prices recorded an eight month high Thursday mainly on reports of increase in China’s copper imports.
Copper for three-month delivery MCU3 on the London Metal Exchange traded at $5,285 a tone from a close of $5,180 on Wednesday. It earlier hit $5,300, the highest since October 14.
A recent spate of improving economic data has helped lift copper prices by more than 10 percent so far in June.
Data showed China's May imports of unwrought copper and semi-finished copper products hit a fresh high for the fourth straight month on continued arbitrage trade.
Adding to speculation China could potentially lead an economic recovery, data showed a surge in investment in May for the world's third-largest economy and top copper consumer. But optimism was tempered by confirmation of a record slump in Japan's first-quarter GDP.
Also underpinning gains, copper stocks at LME warehouses continued their trend of drawdowns, falling 1,100 tones to 293,175 tones and compared with a peak of around half a million tones in late February.
Aluminium prices also surged Thursday owing to drawdown in stocks.
Aluminium MAL3, used in transport and packaging, traded at $1,673 from $1,645. Stocks dropped for the second time this week, down 1,675 tones but holding near a record high close to 4.3 million tones.
Stocks also fell on two days the week before, marking the first stocks declines since April 20.
Analysts also warned demand the outlook for aluminium remained weak, as a potential economic recovery would likely be slow and drawn out, and ahead of a series of possible production restarts in China.
Disclosure I am long IYM and XLB shares.
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