LONDON, Dec 17 (Reuters) - Copper prices neared their highest in almost eight years on Thursday as stockpiles around the world fell, the U.S. Federal Reserve promised to pump more money into markets and hopes for a U.S. stimulus package this week grew.
Buoyant investors sent global equities to new peaks, oil prices to a nine-month high and the dollar to its weakest since April 2018 -- helping dollar-priced commodities by making them cheaper outside the United States.
Benchmark copper on the London Metal Exchange (LME) was up 1% at $7,915.50 a tonne at 1700 GMT, nearing last Friday’s peak of $7,973.50, the highest since February 2013.
“$8,000 is once again in reach,” said Saxo Bank analyst Ole Hansen. “It’s part of the continued ‘everything rally’ we’re seeing across markets.”
But with speculators rushing into copper, a correction will come, he said. “The question is when.”
STOCKPILES: Copper stocks in warehouses registered to the biggest exchanges - the LME, the Shanghai Futures Exchange (ShFE) and Comex in the United States - are falling.
Inventories in the LME system MCUSTX-TOTAL at 127,725 tonnes are the lowest since September, stocks in ShFE warehouses CU-STX-SGH at 82,092 tonnes are the lowest since 2014 and Comex stores HG-STX-COMEX contain 78,084 tonnes, the lowest since June.
SPREAD: However, the discount for LME cash copper over the three-month contract MCU0-3 reached $22.50, the highest since June, suggesting there is no shortage of nearby metal.
POSITIONING: Speculators boosted their net long positions in LME copper to 41% of open contracts by Tuesday, the most since 2017, brokers Marex Spectron said.