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Copper prices in London hit a seven-week high on Thursday after a sharp drop in available stocks in warehouses registered with the London Metal Exchange (LME) to their lowest since 2021.
Benchmark copper CMCU3 on the LME was up 0.8% at $8,675 a metric ton by 1017 GMT after touching its highest since May 2 at $8,711.50 and breaking above the 100-day moving average of $8,696.
“Things are looking quite tight for copper at the moment,” said Dan Smith, head of research at Amalgamated Metal Trading.
LME inventory for the metal used in power and construction MCUSTX-TOTAL has been low for a while and the big jump in cancelled warrants has further reduced the amount of available material.
Technical indicators give $8,870 as a price target over the next couple of weeks, Smith said, adding that stocks show that there are people keen to hang on to copper.
In top metals consumer China, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.1% this week.
Chinese markets are closed on Thursday and Friday for the Dragon Boat Festival, but sentiment there has been weighed down by a lack of meaningful economic stimulus that could support growth in demand for metals.
Supporting base metals prices on Thursday was a weaker dollar =USD, which makes dollar-denominated commodities more attractive to buyers holding other currencies.