SINGAPORE, July 30 (Reuters) - Shanghai aluminium prices touched a more than two-year high on Thursday, fuelled by a better-than-expected recovery in top consumer China and hopes of sustained demand in the next few months.
The most-traded September aluminium contract on the Shanghai Futures Exchange ended up 1.8% at 14,720 yuan a tonne, after hitting its highest since April 2018 of 14,805 yuan ($2,114.21) earlier in the session.
London Metal Exchange’s three-month copper rose 0.3% to $1,729.50 a tonne by 0708 GMT.
“A V-shaped recovery in China props up demand and prices for the metal more than we had anticipated,” Fitch Solutions said in a report, revising its three-month LME aluminium average price forecast for 2020 to $1,690 a tonne from $1,600 earlier.
But growing U.S.-China trade tension and a global resurgence of coronavirus cases posed risks, it added.
China’s finance ministry on Wednesday set an end-October deadline for local governments to complete issuance of special bonds, often used to fund infrastructure projects that consume large amounts of industrial metals.
The U.S. dollar dropped to a two-year trough, making greenback-priced LME metals more attractive to buyers holding other currencies, as the U.S. Federal Reserve left interest rates near zero to support the economy.
* Aluminium inventories in ShFE warehouses AL-STX-SGH were last at 222,498 tonnes, a 58%-drop from the 2020 peak in March, but LME stockpiles MALSTX-TOTAL were hovering around their highest level since April 2017.
* Domestic Chinese aluminium prices SMM-ALU-ING rose to a two-week high of 14,780 yuan a tonne, after hitting 15,320 yuan a tonne on July 13, their highest since November 2017.
* LME copper eased 0.4% to $6,450.50 a tonne, while ShFE copper fell 0.2% to 51,690 yuan a tonne. ShFE zinc jumped 2% to 18,745 yuan a tonne and nickel advanced 1.6% to 111,340 yuan a tonne.
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