LONDON: Copper prices rose on Thursday towards 2-1/2 month highs reached in the previous session as the European Central Bank and German government announced big stimulus packages and US data showed unemployment growth slowing sharply.

Benchmark copper on the London Metal Exchange (LME) was up 0.1% at $5,528 a tonne at 1600 GMT after touching $5,552 on Wednesday.

The metal used in power and construction has risen 25% from a low in March as economies – most importantly China, the biggest consumer – begin to reopen and stock markets rally.

But it remains more than 10% below its January high.

Copper has hit an important technical barrier around $5,540, the low point for prices in 2017, 2019 and January this year, said Saxo Bank strategist Ole Hansen.

“We came to a crossroads … prices hit that old floor, which has now become a ceiling," he said.

Market fundamentals do not justify a move higher, but a break above this level could fuel speculative and technical buying and push prices towards $6,000, Hansen said.

Global equities slipped while the euro gained against the dollar.

The European Central Bank raised bond purchases by 600 billion euros ($674 billion) to 1.35 trillion euros and extended their duration.

The government presented additional stimulus measures worth 130 billion euros ($146 billion).

Benefit claims dropped below 2 million last week for the first time since mid-March.

On-warrant stocks in LME-registered warehouses fell to 165,175 tonnes, their lowest since March 13, after 20,275 tonnes of cancellations.

Inventories in Chinese visible warehouses have also fallen since March.

Indonesia will keep in place a ban on the export of nickel ore even as it relaxes exports of some other minerals, an official said.

LME aluminium was down 0.1% at $1,566.50 a tonne, zinc rose 0.1% to $2,025, nickel fell 0.8% to $12,765, lead gained 1% to $1,738.50 and tin was up 0.3% at $16,055.

Copyright Reuters, 2020