Sentiment improved with equities climbing and with a US report showing applications for state unemployment insurance fell last week to a fresh pandemic low.
A falling dollar also helped underpin gains in metals.
Click here for an interactive chart of copper prices
Copper prices fell almost 4% on Wednesday after China said it will strengthen its management of commodity supply and demand to curb any “unreasonable” increases in prices.
“For the time being, global commodity demand signals are still firing on all cylinders, with the recent weakening still consistent with noise,” TD Securities analysts led by Bart Melek said in a note. But “the context points to risks of normalizing growth.”
“When it comes to commodities, Chinese officials are between a rock and a hard place. A stabilization, or even a decline, in prices would require curbing demand,” said Frederic Neumann, co-head of Asian Economics Research at HSBC.
“On its own, expanding supply, either through increased production or the release of stockpiles, will likely have only a temporary impact in restraining price gains. The trouble with curbing demand, of course, is that it would harm economic growth.”
If supply remains inelastic, “you can’t suppress demand without hurting the economy,” ING senior commodity strategist Wenyu Yao said. “There’s no perfect solution.”
(With files from Reuters and Bloomberg)
