Copper prices extended their push above the $4,000 a tonne level on Monday, leading base metals higher, while oil prices rose and gold consolidated above the $950 level as commodity markets continued last week’s rally.
Copper hit $4,135 a tonne in morning trade in London on Monday, jumping 4.6 per cent from Friday and gaining 34.7 per cent since the start of the year, helped by fresh evidence of demand improving in China.
Chinese imports of refined copper doubled to 270,948 tonnes in February compared with the same month a year ago, the highest monthly inflow since 2002.
Chinese trade data also showed a huge surge in zinc imports which multiplied more than eightfold to 77,205 tonnes, he highest since November 2005.
Zinc rose 1.9 per cent to $1,920 a tonne, up 6.2 per cent this year.
“With Chinese metal imports so strong, either domestic demand is much stronger than anyone thought or Chinese stockpiles are rising very fast indeed,” said Gayle Berry, analyst at Barclays Capital: “Concern that demand might be stronger than previously thought is keeping metals well bid.”
In energy markets, ICE May Brent rose 43 cents to $51.65 a barrel while Nymex May West Texas Intermediate added 38 cents at $52.45 a barrel.
“The rapid fall of the US dollar is likely to be main reason for the sharp gains in crude oil prices over the past few days,” said analysts at Commerzbank: “As long as the dollar shows persistent weakness, oil prices should still have more upward potential. We anticipate much higher oil prices towards the end of the year.”
Commerzbank said that the latest swing in sentiment in the oil market was reflected in speculative market positioning. The latest data from the Commodity Futures Trading Commission showed a shift to a speculative net-long position of 13,500 lots in the week ending March 17 compared with a net short position of 6,000 lots in the previous week. Commerzbank noted that the shift was solely due to short covering and that long positions (bets on prices rising) remained at their lowest level for three months.
“This creates short-term scope for a fresh oil price rally when long positions are built up again,” said Commerzbank.
Gold traded at $951.60 a troy ounce, moving between a low of $949.85 and a high of $957, after ending trading in New York on Friday at $950.85.
