LONDON- Copper prices rose on Thursday after signals from the U.S. Federal Reserve that it was in no rush to tighten and efforts by China to calm fears of new regulation spread a bullish mood through markets.
Global equities rose, China's yuan strengthened and the dollar fell to a one-month low, helping dollar-priced metals by making them cheaper for buyers outside the United States.
Also lifting copper were the threat of a strike at a major mine in Chile and progress of a $1 trillion infrastructure investment bill in the U.S. Senate.
Benchmark copper on the London Metal Exchange (LME) was up 1.2% at $9,805 a tonne in official trading, near a record high of $10,747.50 reached in May.
Many analysts expect demand for copper for power and construction to outstrip supply in the coming years, but with prices up 60% from the start of 2020, a move lower is likely later in the year, said Commerzbank's Daniel Briesemann.
"I'm convinced we will see higher or even much higher prices in the next few years, but it should not be a one way street and we need some healthy corrections," he said.
FED: Jerome Powell said the Fed was "some ways away" from substantial progress on jobs that is needed to start tapering.
CHINA: China stepped up attempts to calm investor nerves after a market rout this week by telling foreign brokerages not to "overinterpret" its latest regulatory actions.
STRIKE: The union of workers at BHP's Escondida copper mine in Chile, the world's largest, called upon its members to vote to strike.
STIMULUS: A roughly $1 trillion infrastructure bill passed a key milestone that moves the legislation toward formal debate and possible passage.
CHINA SALES: China released 170,000 tonnes of copper, aluminium and zinc from its state reserves as part of efforts to keep a lid on prices.
OTHER METALS: Aluminium was up 0.8% at $2,558 a tonne, zinc rose 0.4% to $2,992.50, lead added 0.8% to $2,363, tin gained 1.5% to $34,915 and nickel was 1% higher at $19,745.
(Reporting by Peter Hobson, Additional reporting by Mai Nguyen; Editing by Emelia Sithole-Matarise) ((Peter.Hobson@thomsonreuters.com; +44 207 542 0083;))