Copper’s outright price on the LME was recently seen at $5,529.50 per tonne, while turnover topped the complex over the morning with more than 5,000 lots exchanged as of 9.40am London time.
The red metal’s wide forward curve continues to support buying momentum, with copper’s benchmark cash/three-month spread recently seen at $21.75 per tonne contango.
Meanwhile, LME copper inventories were subject to an outflow of 2,300 tonnes this morning, which further supported higher price action. The bulk of material was removed from LME-registered warehouses in Kaohsiung, Taiwan.
“I’m in no doubt the domestic economy in China is undergoing a V-shaped recovery. Every morning the sound of the city grows louder, construction site jackhammers and the drumming of morning rush hour traffic now starts before 7am,” Bands Financial founding partner John Browning said in a note this morning.
“The last group of schoolchildren, the kindergartens and 1st to 3rd graders, returned to normal schooling yesterday, and their brightly colored school busses are back on the streets this morning. Conversely, I have no idea of the shape of the recovery in the export industries, maybe an L, but I guess it would be best to expect nothing more,” he added.
Elsewhere in the complex, the three-month zinc price was down by 0.5% this morning, recently trading at $1,999.50 per tonne, and slipping from a morning high of $2,023 per tonne. Turnover in zinc was strong at more than 3,000 lots exchanged as of 9.45am London time.
Meanwhile, poor demand and unfavorable forward spreads have continued to see LME zinc trend lower after reaching a high of $2,044 per tonne on May 20.
Zinc’s cash/three-month spread flipped into a small contango of $3.95 per tonne earlier this week.
Other highlights
- LME tin stocks remain on a downtrend after an outflow of 145 tonnes was booked along with a fresh cancelation of some 240 tonnes this morning, but this was offset by a fresh inflow of 265 tonnes. Total on-warrant LME tin stocks now stand at 1,540 tonnes.
- In other commodities, Brent crude oil futures were up by 1.42%, recently trading at $40.04 per barrel.
- West Texas Intermediate (WTI) was recently at $37.97 per barrel, an incline of 0.95%.
- In data from China this morning, the Caixan services purchasing managers’ index (PMI) for the May period improved to 55, beating an expected level of 47.4 and improving from 44.4 in the prior reading.
- Meanwhile, data from the European Union this morning showed similar improvements in the Spanish, Italian and French services PMI numbers, with the United Kingdom’s final services PMI also notching a slight increase to 29, from 27.8 previously.
- The German unemployment change for May was higher than expected at 238,000, exceeding the forecast of 188,000.
- Later, the United States will release data on its ADP non-farm employment change.
