METALS-Copper rebounds on China stockpiling and stronger risk sentiment

By Eric Onstad

LONDON, Feb 3 (Reuters) - Copper prices rebounded on Tuesday after news that China plans to boost stockpiles of the metal and as risk sentiment rekindled among global investors.

Benchmark three-month copper CMCU3 on the London Metal Exchange gained 4.1% to $13,418 a metric ton by 1715 GMT, having sunk to a three-week low in the previous session.

LME copper soared to a record peak of $14,527.50 on Thursday, fuelled by speculative buying, then plunged by 14.5% from that high to an intraday low on Monday.

"Today's bounce is sending quite a strong signal that the underlying appetite for metal exposure has not suffered a sudden death," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"Also, that headline about China increasing their strategic copper reserves, that's something the market likes to hear."

China will expand its strategic reserves of copper and explore building a commercial stockpiling system, an official from the state-backed China Nonferrous Metals Industry Association said on Tuesday.

The most active copper contract on the Shanghai Futures Exchange SCFcv1 climbed 2.6% to close daytime trading at 104,500 yuan ($15,066) a ton.

Industrial metals joined gold and other financial markets in bouncing on Tuesday as investor sentiment picked up, partly because of a long-awaited trade deal between the U.S. and India. MKTS/GLOB

Analysts were still cautious about copper, which has been facing weak demand and rising inventories.

"I don't feel that the current fundamentals are strong enough to justify a strong rebound, but if the speculative demand is strong enough, then prices can overshoot to the upside," Hansen added.

LME nickel CMNI3 climbed 3.2% to $17,370 a ton after Macquarie boosted its 2026 average price forecast to $17,750 from $15,000 after top producer Indonesia cut mining quotas.

"The net impact is to lower our projection of the global market balance from a surplus of 250,000 tons this year to 90,000, effectively stopping the sharp rise in world inventories," Macquarie analyst Jim Lennon wrote in a note.

LME aluminium CMAL3 gained 1.7% to $3,107 a ton, zinc CMZN3 added 0.1% to $3,328, tin CMSN3 jumped 7.6% to $50,150 and lead CMPB3 was unchanged at $1,963.

($1 = 6.9359 Chinese yuan renminbi)