Copper posted the biggest gain in about four years, leading a surge in metals, as exports from China jumped and BHP Billiton Ltd signaled a halt in shipments from the world’s largest copper mine.
Overseas shipments from China, the top industrial-metals user, last month rebounded with exports to the US rising, according to customs data.
BHP declared force majeure on shipments from the Escondida mine in Chile after workers began a strike on Thursday, two customers notified by the company said.
An index of the six main metals traded in London is off to its best start to a year since 2012, helped by bets on improving global economic growth and mounting supply concerns for some metals. Signs of easing trade tensions between the US and China also helped boost metals on Friday.
“We continue to see concerns about the deficit in the copper market,” Bart Melek, head of global commodity strategy at TD Securities in Toronto, said in a telephone interview. “We could have a significant deficit if this strike continues for a while.”
Copper for delivery in three months climbed 4.6 percent to settle at US$6,090 a tonne at the London Metal Exchange. That is the biggest gain since May 2013. The contract is up 5.6 percent from last week’s US$5,763.75 per tonne.
IRON BACK TO US$100
Iron ore on Friday rallied to push futures in China back to US$100 a tonne as spot prices trade at levels last seen in 2014, boosting miners’ shares.
On China’s Dalian Commodity Exchange, most active futures surged as much as 8.3 percent to 694 yuan (US$101) a tonne and settled at 688 yuan, while Singapore’s SGX AsiaClear contract also climbed.
Spot ore with 62 percent content in Qingdao advanced 3.3 percent to US$86.62 a dry tonne, the highest since September 2014, according to Metal Bulletin Ltd.
Iron ore rallied last year as China added stimulus, supporting steel production and confounding bears who had highlighted prospects for additional low-cost output and concerns that the top buyer would not be able to absorb the supply.
The same dynamic has been at play in recent weeks, with banks including Goldman Sachs Group Inc flagging risks of weaker prices over the course of this year even though near-term support was seen as strong.
Friday’s gain came amid optimism about the immediate outlook for consumption.
“Construction demand is returning, with developers reportedly buying steel now even if they have not resumed construction on certain projects,” Kallanish Commodities Ltd analyst Tomas Gutierrez said in an e-mail.
Data from China on Friday pointed to robust local demand for iron ore, as well as steel, as imports of the raw material rose while overseas sales of steel fell.
With stockpiles of iron ore at China’s ports at a record and miners, including Brazil’s Vale SA, bringing on new supply, Liberum Capital Ltd is among forecasters seeing lower prices, predicting a drop back below US$50 in the second half of the year.
Citigroup Inc has said it sees a sharp correction, while top forecaster RBC Capital Markets described prices last month as unsustainable.
Precious metals:
Gold on Friday fell 0.2 percent to US$1,234.60 an ounce, after dropping 1.1 percent on Thursday. The metal, which is considered a haven asset, is up 1.1 percent from last week’s US$1,220.80.
Spot silver on Friday settled at US$17.61 an ounce, posting a seventh straight weekly gain, the longest rally since March 2011. The metal slightly rose from last week’s US$17.50 an ounce.
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