Copper Rises on Oil Price, Capping Best Monthly Gain in a DecadeBy
Advance comes even as Chinese bourses move to curb speculation
Other five major metals on the London Metal Exchange also gain
Copper added to gains in November to cap the strongest month in 10 years after a surge in oil prices.
All metals were higher as a meeting of the Organization of Petroleum Exporting Countries in Vienna was said to agree to cut crude output. The London Metal Exchange Metals Index that tracks the six major metals traded on the bourse climbed 12 percent this month, marking the biggest increase since December 2010.
The gains added to a surge in metals this month, driven partly by traders in China, even as authorities took steps to limit speculation in local commodity markets. Zinc and lead dropped by their daily limit on the Shanghai Futures Exchange, with the bourse saying after the close that it would curb positions on some contracts for the metals.
“Buyers seemed to have re-emerged,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a note. “We still would not want to short any of these markets right now as the uptrends in most remain intact.”
Copper for delivery in three months gained 2.1 percent to settle at $5,825 a metric ton ($2.64 a pound) at 5:53 p.m. on the LME. The metal gained 20 percent for the month, its biggest gain since April 2006.
While higher oil prices are supporting metals, the gains may be short-lived, according to Dan Smith, head of commodities research at Oxford Economics Ltd. in London.
“An OPEC cut will only reflect the fact that fundamentals in the oil market are pretty poor,” Smith said by phone. “In China, regulators are tightening things up in terms of housing and other overextended markets, so for copper the risks are still to the downside.”
Measures by exchanges to limit speculation prompted Citigroup Inc. on Tuesday to warn of a short-term correction in prices.
Industrial commodities also rose this month on optimism that demand will increase following strong U.S. economic data and President-elect Donald Trump’s pledge to boost infrastructure spending.
In other metals news:
- Zinc rose, boosting its gains in November to 9.7 percent, and lead ended the month up 15 percent. Aluminum, nickel and tin all increased Wednesday in London.
- Copper futures for March delivery rose 0.9 percent to $2.633 a pound on the Comex in New York.