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Tuesday, 08 September 2015 17:57
LONDON: Copper surged on Tuesday, boosted by data showing healthy Chinese imports and a bounce in hard-hit equity markets in the world’s top metals consumer.
“Base metals got lifted up by the equities market rally and Chinese unwrought copper imports remained healthy in August,” said Xiao Fu, head of commodity market strategy at Bank of China International in London.
Announcements of production curtailments, such as Glencore’s on Monday, added to the more positive sentiment, but this may not last ahead of a Sept. 16-17 Federal Reserve meeting, she added.
“Market anticipation of a Fed rate hike could introduce some macro headwinds, so I don’t think any rallies from current levels will be sustained.”
Three-month copper on the London Metal Exchange had climbed 2.4 percent to $ 5,270 a tonne by 1000 GMT after ending a little firmer in the previous session. Copper has rebounded about 9 percent since touching a six-year low of $ 4,855 a tonne on Aug. 28, largely on fears of a hard landing in China. China’s overall imports shrank far more than expected in August, adding to global investors’ concerns that the world’s second-largest economy may be slowing more sharply than expected.
The country’s copper imports, though, were flat to July and up 2.9 percent from a year earlier at 350,000 tonnes. “It’s a positive sign. Within any recovery you want to see signs of a pick up in demand, a firming in premiums.
We’re seeing those imports pick up so that’s relatively positive for copper,” said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance.
Also helping to support copper were a series of supply cuts. London-listed mining giant Glencore said on Monday it planned to suspend 400,000 tonnes of output at African mines over the next 18 months.
Data also showed the euro zone economy grew faster than expected in the second quarter, mainly because of faster growth in Italy and Greece.
China’s aluminium exports dropped again, after global premiums collapsed this year, making shipments to global markets less competitive. Global prices had been depressed by a flood of semi-manufactured exports out of the country.
LME aluminium added 1 percent to $ 1,616 a tonne while zinc gained 1.5 percent to $ 1,798 and nickel rose 1.7 percent to $ 9,920.
