Copper prices rose more than 3% on Thursday after the US Federal Reserve gave an optimistic view of the outlook for the world’s largest economy, boosting risk appetite.
The three-month benchmark copper contract on the London Metal Exchange (LME) was up 3.2% at $9,496 a ton as of 1135 GMT, heading for its biggest daily gain since October.
“The increase in US interest rates next year is a sign that the economy is doing well and the Fed is giving the impression that everything is under control,” said Daniel Pressman, analyst at Commerzbank.
The Federal Reserve said that the US economy will remain resilient despite the spread of the coronavirus omicron variable and pointed to low unemployment numbers, paving the way for three interest rate increases of a quarter of a percentage point through the end of 2022.
MMG Ltd said it would not be able to continue production at the Las Pampas copper mine in Peru. The mine accounts for 2% of the world’s copper supply.
Copper stocks in LME-listed warehouses rose to 89,475 tons, trimming their year-to-date decline to 6%. Meanwhile, spot copper on the London Metal Exchange earned a premium of $22 a ton on a three-month contract.