LONDON – Copper prices rose on Monday as floods in top consumer China sparked demand hopes at a time when inventories were falling, while a softer dollar also supported prices.
Benchmark copper on the London Metal Exchange was up 0.9% at $9,604.50 per tonne in official trading, after touching its highest since June 16 at $9,665. It was on track for a fifth straight session of gains.
Floods in central China, especially in the industrial and transport hub city of Zhengzhou in Henan province, have raised supply concerns and demand for rebuilding damaged infrastructure.
Copper is mainly used in the construction and power industries and China accounts for about half of global copper consumption.
“Sentiment has brightened again in the last few days, reflected in the copper price,” Commerzbank analyst Daniel Briesemann said according to Reuters, adding he believed copper was due for a correction, having hit a record of above $10,700 a tonne in May.
A Singapore-based trader said the market was pricing in disruptions to output from floods in Henan and demand for reconstruction.
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