A stack of copper plates at a factory in Shanghai, China (Photographer: Kevin Lee/Bloomberg News)

Copper Tears Through $7,000 on China Optimism as Producers Rally

(Bloomberg) -- Copper surged above $7,000 a metric ton for the first time since 2014 as metals rallied on stronger Chinese factory data and Federal Reserve Chair Janet Yellen warned that U.S. inflation may accelerate.

The red metal jumped as much as 4.3 percent on the London Metal Exchange, while nickel climbed for a seventh session, the longest run since August. Strengthening metal prices helped push up stocks, with First Quantum Minerals Ltd. and Freeport-McMoRan Inc. rising as much as 5.9 percent and 5.7 percent, respectively.

Industrial metals have gained amid sustained optimism about the strength of Chinese consumption and signs that inflation is picking up in other major economies as global growth rebounds. Data on Monday showed China’s factory prices jumped more than estimated and domestic demand remained resilient.

“Copper’s been so strong,” Richard Fu, head of Asia-Pacific sales at Amalgamated Metals Trading Ltd. in London, said by phone. “The Chinese PPI numbers were much better than expected, and they come after some very good growth figures from places like the U.S., Korea and Germany.”

Copper for three-month delivery climbed 3.7 percent to settle at $7,134.50 a ton at 5:51 p.m. in London. Lead, nickel and aluminum also closed higher while tin was unchanged. Zinc declined.

The gains in metal prices offer a bullish backdrop before China’s political elite gather in Beijing for the twice-a-decade Communist Party congress this week. Investors will be looking for indications on how President Xi Jinping’s government will steer the world’s top metals user into next year and beyond.

“The focus at the plenary will be more on the political side, but macro policy should remain positive for the Chinese economy,” AMT’s Fu said. “No one knows where the next move will be, but I see more supportive factors than downsides for base metals.”

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