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09.11.2016

Copper hits 15-month high after Trump wins White House

Copper surged to its highest in more than 15 months on Wednesday, taking most of the complex to multi-month highs as investors tried to interpret the implications of Donald Trump's victory in the U.S. presidential election.

Metals prices were being boosted by the prospect of a period of significant fiscal stimulus in the United States, after Republican Trump defeated Hillary Clinton.

In his victory speech, Trump said he would embark on a project to rebuild American infrastructure and would double U.S. economic growth.
"The Republicans have control of both houses of Congress and that means there is a possibility that those kind of programmes could become reality," ICBC Standard Bank analyst Tom Kendall said.

Three-month copper on the London Metal Exchange rose as much as 3.4 percent to its highest since July 2015 at $5,443 a tonne and was up 2.1 percent at $5,346.50 by 1135 GMT.

The metal was on track for its biggest daily increase since March. Estimates of speculative interest suggest that LME copper positioning reached the largest long position since February 2011, according to broker Marex Spectron.

"Over the last few days, there has been in the market a short-term CTA-type buying momentum and investors are now looking at the next level at around $5,445," ICBC Standard's Kendall said.

"It's pretty technical, and we had a big drop in cancelled warrants this morning and also good inflation data out of China which are helping."
The most-traded copper contract on the Shanghai Futures Exchange closed 3 percent higher at 41,600 yuan a tonne, tracking last session's gains on the LME.

The U.S. dollar and stocks remained under pressure on Wednesday after falling sharply when it became clear the Trump was set for victory.
LME aluminium rose to its highest since June 2015 at $1,746.50 a tonne and nickel hit its highest since July 2015 at $11,565. Zinc rose 0.7 percent to $2,495, while lead rose 1 percent to $2,148.50 a tonne.

In China, banks extended 1.22 trillion yuan ($180 billion) in new loans in September, capping a record nine-month lending spree. Much of the growth in recent months has been driven by a rapid rise in home mortgages.

China's imports of copper fell 14.7 percent from a month ago to 290,000 tonnes in October, its lowest since February 2015, customs data showed on Tuesday. The country accounts for about half of global consumption of industrial metals.

"Inventories of copper held on the LME fell for the fourteenth straight day and are now down 34 percent over the past six weeks," ANZ said in a note. "That was backed up by data showing strong vehicle sales in China in October."

The JPMorgan Global Manufacturing PMI rose to a two-year high of 52.0 in October.

Source: Reuters

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