Copper up on U.S. recovery hopes, but China virus outbreak caps gains

SINGAPORE — London copper prices rose on Wednesday on hopes for higher demand as the U.S. economy showed signs of a recovery, but optimism was crimped by a coronavirus outbreak in top metals consumer China.

U.S. retail sales increased in May by the most on record after two straight months of sharp declines, adding to evidence that the world’s biggest economy was picking up steam.

A “major breakthrough” in COVID-19 treatment also boosted risk sentiment.

The demand outlook for metals was also supported by reports that the Trump administration was preparing an infrastructure package of up to $1 trillion focused on transport projects.

Three-month copper on the London Metal Exchange (LME) was up 0.5% at $5,756.50 as of 0710 GMT, while the most-traded July copper contract on the Shanghai Futures Exchange ended flat at 46,770 yuan ($6,598.38) a tonne.

China’s capital Beijing reported 31 new coronavirus cases by Tuesday, up from 27 a day before, raising fears of a second wave of infections.

“A large part of the rally seen in metals since April has been a result of the demand recovery out of China, and so clearly metals markets will be watching closely how this situation evolves,” ING analysts said in a note.