Thursday, 16 July 2015 14:53
MELBOURNE: London copper climbed on Thursday as risk appetite revived after Greece’s parliament passed severe austerity measures but gains were capped on persistent concern that China’s volatile sharemarket could upset early signs of economic recovery.
Euro zone jitters began to ease after the Greek parliament passed a sweeping package of austerity measures demanded by European partners.
China stocks rebounded on Thursday, but traders were still cautious about whether China could contain its volatile sharemarket after last week’s crash, even as green shoots emerged from its beaten down property market that could bolster demand later in the year.
“We believe the stabilisation and continuous recovery in the housing sector will be the key to spur new demand for commodities and ease overcapacity concerns,” Helen Lau of Argonaut Securities in Hong Kong said in a note.
“China’s government has room for more monetary easing and fiscal stimulus. We believe the current commodities prices and share prices of commodity stocks (has) reached the bottom.”
Three-month copper on the London Metal Exchange climbed 0.9 percent to $ 5,580 a tonne by 0748 GMT. Prices are struggling to regain upward momentum after plunging to a six- year low of $ 5,240 a tonne last week.
Shanghai Futures Exchange copper climbed half a percent to 40,680 yuan ($ 6,552) a tonne.
China’s economy grew an annual 7 percent in the second quarter, beating analysts’ forecasts, although its volatile stock markets took a sharp dive in a reminder of the threats to Beijing’s efforts to direct the economy out of a slowdown.
China plans to give more of its importers subsidised loans as part of wider efforts to shore up the trade sector, the Chinese cabinet said on Wednesday.
Elsewhere, a stronger dollar added headwinds to metals prices, by making the sector more expensive for buyers holding other currencies after the Fed Chair repeated her view that the Fed will likely hike interest rates later this year if the U.S. economy expands as expected.
In other metals, ShFE nickel ended down half a percent, amid ample stocks and moribund demand from stainless steel mills. Premiums for bonded nickel in China fell $ 10 to $ 150 this week, the weakest since May.
China’s stainless steel mills may use more refined nickel as prices of the steel-making ingredient fall below the cost of nickel pig iron, but traders downplay the prospect of any spike in refined nickel demand as mills shut for seasonal maintenance.
