June 10, 2020 / 12:41 PM / 2 months ago

CORRECTED-METALS-Copper glides to highest since January on technicals, demand uplift

(Changes reference to CME from LME in paragraph 11)

* GRAPHIC-2020 asset returns: tmsnrt.rs/2jvdmXl

* LME copper resistance now sits at $6,050/t - Saxo Bank

By Zandi Shabalala

LONDON, June 10 (Reuters) - Copper prices rose for a fifth straight session on Wednesday to their highest since January, supported by firm demand and an improved technical picture.

Benchmark copper on the London Metal Exchange (LME) was up 2.1% to $5,893 per tonne by 1600 GMT, after touching its loftiest since Jan. 24 at $5,913.50.

“Copper is being carried higher by an improved fundamental outlook but also by an improved technical picture,” said Saxo Bank analyst Ole Hansen.

The metal broke through the 100- and 200-day moving averages recently, prompting further buying.

The next area of resistance for LME copper lies at $6,050, Hansen said.

GOLDMAN SACHS: The investment bank raised its copper and aluminium forecasts, and lifted its 12-month commodity returns forecast to 13.1%.

INVENTORIES: On-warrant LME copper stocks MCUSTX-TOTAL fell to their lowest since Feb. 24 at 130,225 tonnes, while Shanghai Futures Exchange copper inventories CU-STX-SGH were at their lowest since Jan. 17.

Bonded warehouse stockpiles in China SMM-CUR-BON were last at 213,000 tonnes, near record lows hit last month.

Analysts and traders say the drawn-down LME stocks are headed for China, where prices are higher.

CHINA COPPER: Chinese domestic spot prices of refined copper SMM-CU-REF rose to 46,350 yuan a tonne, their highest since Jan. 23, indicating strong demand in top consumer China.

POSITIONING: “Net positioning on CME copper is on the verge of turning long, with the net short position shrinking from over 40,000 contracts in February to just 895 contracts as of early June,” said BMO analyst Timothy Wood-Dow.

“Any aggressive buying here would have a positive effect on prices.”

U.S. DOLLAR: The dollar is trading at its weakest in three months, supporting prices of dollar-denominated commodities.

OTHER PRICES: LME aluminium rose to its highest since March 20, up 1.4% to $1,628 a tonne, zinc added 0.6% to $2,028.50, lead shed 1.3% to $1,742.50, tin gained 1.6% to $17,200, and nickel rose 0.8% to $13,010. (Reporting by Zandi Shabalala; Additional reporting by Mai Nguyen; Editing by Jan Harvey and Jane Merriman)

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