Copper futures climbed to a six-week high on speculation that production cuts in China will help reduce a supply glut.
Nine of the biggest copper producers have agreed to cut sales by 200,000 metric tons in the first three months of 2016, people with knowledge of the matter said Tuesday. The same group had already pledged to pare output next year. Copper is on its way to a third straight annual decline, the longest slump since 1998, amid faltering demand in China, the world’s biggest user.
“The promise of a 200,000-ton cut in the first quarter of 2016 is helping to keep copper firm in thin year-end trading conditions,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “These cuts suggest that producers may further adjust supply in the face of weak pricing and low demand.”
Copper futures for March delivery gained 0.5 percent to settle at $2.1465 a pound at 1:16 p.m. on the Comex in New York, after touching $2.1485, the highest since Nov. 16. Prices are up 4.8 percent in December, heading for the first monthly increase since September.
Trading on Wednesday was 54 percent below the 100-day average for this time, according to data compiled by Bloomberg.
On the London Metal Exchange, copper for delivery in three months rose 0.1 percent to $4,735 a ton ($2.15 a pound).
Lead and zinc also advanced in London, while aluminum, nickel and tin declined.
An index of the six main metals traded on the LME is heading for its first monthly gain since April. The Bloomberg Commodity Index, a measure of investor returns in raw materials, is heading for the biggest annual decline since 2008 after demand slowed in China.