METALS-Copper hits six-week high on rumors China is easing COVID restrictions

By Eric Onstad

LONDON, November 4 (Reuters)Copper prices hit their highest level in six weeks on Friday as fresh rumors swirled that China would ease its tough COVID-19 measures as supply issues persisted.

three month old copper CMCU3 on the London Metal Exchange (LME) jumped 4.4% to $7,895 a tonne as of 1100 GMT after hitting its highest level since September 13 at $7,918.

A former Chinese disease control official said on Friday that China would soon substantial changes to its COVID-19 policy but did not provide the basis for this information.

Other unverified reports emerged this week that the main metals consumer, China, is closing in on the rest of the world by removing coronavirus curbs.

“Our Chinese economist is very skeptical of these rumours. He believes that with the low level of vaccination, the government is not going to move anytime soon,” said Caroline Bain, chief commodities economist at Capital Economics.

Prices were also supported by the latest mining supply disruption, with the huge The Bambas copper mine in Peru saying on Thursday it had started to scale back operations due to recent lockdowns.

“Chile’s copper production was down 4% in September, so everything on the supply side is really supportive of prices and stocks are also very weak,” Bain said.

Copper stocks in the LME warehouse fell by 5,375 tonnes on Friday to 88,600 tonnes, the lowest in more than seven months. MCUSTX-TOTAL

Copper stocks in warehouses tracked by SHFE fell 6.9% week after week at 59,064 tonnes on Friday.

Traders will be watching the US payrolls report, due at 12:30 GMT, for any upside surprises that could bolster the Fed’s hawkish outlook, analysts said.

Economists polled by Reuters expect payrolls to have risen by 200,000 jobs in October.

Among other metals, aluminum LME CMAL3 gained 2.3% to $2,317 a tonne, zinc CMZN3 jumped 4.6% to $2,845, leading CMPB3 added 0.6% to $2,007, nickel CMNI3 climbed 3.1% to $23,500 and tin CMSN3 rose 2.1% to $18,130.

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(Reporting by Eric Onstad Additional reporting by Siyi Liu and Dominique Patton in Beijing Editing by David Goodman)

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Carol N. Valencia