6.4 C
New York
Friday, March 24, 2023

Copper gains on China demand hopes, supply cuts

Copper gains on China demand hopes, supply cutsLONDON: Copper prices rose 1 percent on Wednesday, supported by bets that demand in top consumer China is set to improve thanks to government stimulus, and by news that mining giant Glencore will deepen cuts in its output of the metal.

Glencore said it expects to cut 455,000 tonnes of copper output by the end of 2017. In September, it suspended copper output at two mines in Africa, removing 400,000 tonnes of cathode from the market.

In China, equities posted their biggest daily gain in seven weeks, after President Xi Jinping made economy-friendly comments and the government unveiled proposals for a five-year financial market reform plan.

Copper prices have stabilised over the past month, alongside global equities, as investor fears over a sharp slowdown in China, the world’s second-biggest economy, have subsided thanks to some positive data.

“We’re already seeing tentative signs that things will pick up (in China) but the market is on hold waiting for data next week on China’s trade, which will give an indication on whether the strong (September) figures will be sustained,” said Caroline Baine, senior commodities economist at Capital Economics.

Three-month copper on the London Metal Exchange climbed 1.1 percent to $ 5,183 a tonne by 1133 GMT. The price hit the weakest in a month at $ 5,086.50 on Monday, but has held above a six-year low of $ 4,855 reached in late August.

Underpinning prices, LME copper stocks fell by 3,100 tonnes to 263,125 tonnes, down nearly 30 percent since late August to the lowest since February, data showed.

Elsewhere, the dollar inched towards 2-1/2-month highs against a basket of currencies, capping gains in dollar-priced metals by making them costlier for non-U.S. investors.

The dollar is being buoyed by returning expectations of a rise in U.S. interest rates and better growth globally, with markets awaiting Friday’s U.S. non-farm payrolls report for more clues on the outlook.

In other news, U.S. aluminium premiums have jumped to their highest in three months after Alcoa announced plans to idle the bulk of its U.S. smelting capacity, stirring speculation among traders that the market may have turned a corner.

But reflecting oversupply in China’s domestic market, Shanghai aluminium premiums have dropped $ 10 to $ 115, the lowest since early August, and matching the lowest since early 2012.

Aluminium was up 0.5 percent at $ 1,508 a tonne.

Copyright Reuters, 2015

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles