TRYNESS TEMBO, Lusaka
THE demand for metals on the commodity market has boosted the price trends, which were previously low and paralysed most commodity-driven economies like Zambia the past months, analysts note.
Copper, zinc and nickel prices on the London Metal Exchange (LME) hit their highest levels in nearly two weeks on Friday due to a positive projection for Chinese demand and looming shortage.
Reuters reports: â€œCopper hit its highest level in nearly two weeks on Friday and zinc also rallied on brighter prospects for Chinese demand and concern about the potential for looming shortages.â€
Three-month copper on the LME traded up 0.4 percentage point to US$4,595 a tonne after earlier hitting US$4,631.50, the highest since February 9.
Commenting on the development, VTB Capital in London head of commodities research Wiktor Bielski said there are a number of factors that have come into play that suggests: â€œwe are at a market bottomâ€.
â€œYou have got a change in fundamentals from surplus to deficit, youâ€™ve got the dollar peaking and youâ€™ve got help beginning to come in China from stabilisation and certainly a significant monetary boost,â€ he said.
UBS analyst Lachlan Shaw also said some signs have emerged to suggest Chinaâ€™s infrastructure spending drive is feeding through into the real economy such as a pick-up in electrical wire fabrication and rising grid spend.
Zinc gained 1.8 percent to US$1,727 a tonne, the highest last week, after signals that closures of major mines were creating shortages of semi-processed concentrate while Lead also snapped back by 1.2 percent to US$1,746, reversing losses earlier in the week after big inflows to LME warehouses.
LME nickel, up 0.6 percent to US$8,400 a tonne, was the top performer in base metals with a bounce back of over seven percent as China buyers sought to import more metal to put on financing deals after prices were heavily sold over Lunar New Year.
Meanwhile, oil prices fell on Friday but are set for their first weekly increase this month as talk of a co-ordinated plan by producers to freeze output levels was tempered by a record build in United States crude inventories.
TRYNESS TEMBO, Lusaka