LME Cu above $10,000/t in early trade on falling stocks

Copper prices on the London Metal Exchange (LME) climbed above $10,000/t during intra-day trade for the first time in four months as warehouse inventories significantly depleted today.

The three-month copper contract hit a high of $10,186/t during the morning session, the first time the red metal has been above $10,000/t since mid-July.

Prices have been supported by a continued drawdown in warehouse stocks in recent weeks.

There was a 33,000t cancellation of copper stocks in the LME warehouse system today ,the majority of which was in Rotterdam. Cancellations for copper stood at 92.2pc today compared with 74.95 yesterday.

On-warrant copper stocks across the LME warehouse system stood at 14,150t following the cancellation, falling by 69.8pc from yesterday's level. Of the remaining stocks 7,725t are in Rotterdam with 5,375t in Hamburg. The balance is divided between Bilbao, Singapore and Kaohsiung.

Copper stocks have declined by 100,050t over the past two weeks.

Rising energy costs, power shortages, logistical issues and subsequent impacts on supply have boosted bullish sentiment in the copper market recently, further aiding prices.

Supply woes were further exacerbated today when major resources firm Rio Tinto reduced its mined and refined copper production guidance for the year to 500,000t and 190,000-210,000t, down from 500,000-550,000t and 210,000-250,000t, respectively.

The firm also pushed back the start of sustainable production at its large Oyu Tolgoi mine in Mongolia to no earlier than January 2023, from a previous target of October 2022.

By Corey Aunger