(Updates prices, adds analyst comment)
LONDON, Feb 19 (Reuters) - Copper jumped to its highest in more than nine years on Friday and logged its third straight weekly gain as tight supplies and bullish sentiment towards base metals continued after the Chinese New Year.
Benchmark copper on the London Metal Exchange (LME) added 4.4% to $8,930 a tonne by 1723 GMT. The metal used in power and construction touched a peak of $8,995, its highest since September 2011.
“The return of the Chinese market post the Lunar New Year has seen some renewed interest in base metals,” said Gianclaudio Torlizzi, a partner at consultancy T-Commodity in Milan.
“The very short term for copper is bullish, but we are in the latest phase of a rally and we would look to short the area closer to $9,000.”
Sucden Financial head of research Geordie Wilkes said copper was also supported by sustained signs of recovery in the United States and Europe thanks to coronavirus vaccines.
“While we expect the market to correct to the downside, these dips will likely be well bought,” he said.
INVENTORIES: Inventories of copper in warehouses registered with the LME are near 2005 lows at 75,700 tonnes. Cancelled warrants - metal earmarked for delivery - account for about 39% and further fuelled concerns about tight supply on the LME market.
POSITIONING: Speculative interest in copper was elevated, adding to interest in the metal.
The net speculative long on LME copper is seen at 45% of open interest at Wednesday’s close, near the year-to-date peak of 46% last month, brokerage Marex Spectron said.
CHINA STOCKS: Stocks of copper, zinc and aluminium jumped in warehouses monitored by the Shanghai Futures Exchange after the Chinese New Year. CU-STX-SGH
CHINA DEMAND: The Yangshan copper premium SMM-CUYP-CN, paid on top of LME prices for physical delivery, has climbed to $72 a tonne, indicating higher Chinese demand for metal imports.
DOLLAR: A weaker dollar also helped to boost the appeal of metals priced in the currency.
OTHER PRICES: LME aluminium eased 0.2% to $2,131 a tonne, zinc firmed by 0.5% to $2,869, lead jumped 2.1% to $2,160.50 and tin climbed 5.3% to $26,250 after touching its highest since August 2011 while nickel was up 2.6% at $19,650.
Reporting by Zandi Shabalala Additional reporting by Enrico Dela Cruz in Manila Editing by David Evans and David Goodman