David Fickling, Columnist

Copper Rally No Prelude to Roar

Beneath the surface, signals still point to weak demand.

November 2, 2016 at 5:27 AM UTC

David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

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Suddenly copper, the dullest of the main industrial metals this year with a paltry 4.6 percent gain, is looking a bit shinier.

The metal has jumped 6.1 percent since the start of last week in seven consecutive days of rising prices, its longest rally in 18 months.

That rally seems to be underpinned by real movements of metal. Canceled warrants -- a measure of stocks in the London Metal Exchange's warehouses that have been reserved for delivery by buyers -- hit almost 135,000 metric tons Tuesday, their highest level since March 2014. Nearly 42 percent of the copper cathode stacked in the LME's depots is marked for shipment, up from less than 13 percent at the start of September.

Forward-looking indicators also justify the bullish view. Caixin's manufacturing purchasing managers' index, a closely watched gauge of Chinese industrial activity, rose to 51.2 Tuesday -- its strongest level since July 2014.