Copper rises towards 7-month highs as risk appetite revives

LONDON, March 12 (Reuters) – Prices of copper and other base metals rose on Tuesday as the dollar weakened and last-minute tweaks to Britain’s Brexit deal revived appetite for riskier assets. Benchmark copper on the London Metal Exchange (LME) was up 1 percent at $6,472.50 a tonne at 1109 GMT, nearing a 7-month high of $6,540 touched on Feb. 25. Underpinning the rise in copper prices — which have recovered from early January’s eighteen-month low of $5,736 — are tight supplies and signs that demand in China, the biggest consumer, may hold up better than feared. “Leading indicators of real demand are showing some signs of life,” said ICBC Standard analyst Marcus Garvey, pointing to recent increases in lending and local government bond issuance in China. Copper is likely to return to the high $6,000s later this year, he said. GLOBAL MARKETS: Last-minute tweaks to Britain’s deal to leave the European Union triggered gains across global stocks and propelled sterling higher on Tuesday. DOLLAR: The dollar weakened for a third day, helping boost metals by making them cheaper for buyers holding other currencies. TIGHT COPPER MARKET: Headline stocks of copper in LME-registered warehouses fell to 112,725 tonnes, the lowest since May 2008. With one entity holding between 40 and 49 percent of LME warrants <0#LME-WHL>, the premium for cash metal over the three month contract MCU0-3 remains unusually high at $28 a tonne. CHINA PREMIUMS: Chinese import premiums have risen to $56.50 from a near two-year low of $52.50 last week, a positive demand signal. POSITIONING: Speculative investors cut bets on higher copper prices, with the net long in LME copper falling to 3.4 percent of open contracts by the end of last week from 13.5 at the start of March, according to brokers Marex Spectron. LAS BAMBAS: Production at Chinese miner MMG Ltd’s Las Bambas copper deposit in Peru could fall “in the near-term” due to a month-long road blockade by a community that was relocated to build the mine, the company said. TRADE TALKS: The White House said on Monday it was “absurd” to suggest that President Donald Trump was an unreliable negotiator as China reportedly balks at a summit with President Xi Jinping over concerns Trump would walk away from a trade deal.  OTHER METALS: LME aluminium was up 1.4 percent at $1,874 a tonne, zinc was 1.8 percent higher at $2,787.50, nickel rose 2.1 percent to $13,170, lead gained 0.2 percent to $2,080.50 and tin was up 0.5 percent at $21,150.