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Copper drifts towards 9-year high on demand outlook, defies firm dollar

Benchmark LME copper edged higher on Wednesday, hovering around 2012 highs on optimism about a global economic recovery that bodes well for metals demand, against the backdrop of tightening supply.

Extending its rally into a fourth consecutive session,three-month copper on the London Metal Exchange rose as much as 0.3% to $8,432.50 a tonne in early trade. It hit $8,437on Tuesday, its strongest level since May 2012.

Copper, which is often used as a gauge of global economic health, defied a firmer U.S. dollar that usually dampens the appeal of greenback-priced metals.

Fundamentals

* Goldman Sachs and Citi have raised their 12-month price target for copper to $10,000 a tonne, while ANZ reiterated a12-month target of $9,000 a tonne “with risk skewed to theupside”.

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* Global copper smelting activity fell in January, led by Europe and North America, as pandemic lockdowns dampened industrial activity.

* The Shanghai Futures Exchange is set to reopen on Thursday after a week-long Lunar New Year holiday in top metals consumer China.

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