OREANDA-NEWS. Three-month copper prices on London-based metal exchange LME rose to $6,495/t on 9 August — the highest since November 2014 — on a stronger economic outlook, a potential ban on Chinese scrap copper imports and a supply deficit.

The improvement in China's economic outlook has been a major factor behind rising prices. This has been driven primarily by Beijing's attempts to stimulate economic growth, increasing copper consumption as a result.

China's Caixin PMI for manufacturing covering small-to-medium-sized businesses rose to 51.1 in July from 50.4 in June, the highest reading in four months. The increase was supported by a solid increase in total new business with companies indicating that output and new orders rose at the fastest rates for five months, helped by an upturn in new export sales.

The IMF also increased its growth forecast for the country by 0.1pc to 6.7pc for 2017. So far in August the S&P 500 has continued to reach record highs and a weaker US dollar has led to positive sentiment from investors.

Money manager net long positions on the LME were at 72,563 lots on August 4 increasing from 63,365 lots a month earlier, according to the latest LME commitment of traders report (COTR).

Scrap ban

Reports that China will add scrap metals to its list of banned imports from late 2018 have added support to copper prices.

The China Nonferrous Industry Association (CNIA) received notification on 25 July from Chinese regulatory authorities that the government will ban the importing of copper scrap from the end of 2018.

It is estimated that the ban will reduce Chinese copper scrap imports by 234,000-328,000t of contained copper, based on 2016 Chinese copper scrap imports.