London copper prices edged higher on Tuesday, supported by monetary policy easing in top consumer China, although caution over the impact of the Omicron COVID-19 variant persisted.
Three-month copper on the London Metal Exchange was up 0.2% at $9,527.5 a tonne, as of 0800 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange closed up 0.1% at 69,420 yuan ($10,902.07) a tonne.
“The stimulus measure is expected to support economic growth, with recent tighter credit conditions impacting the property sector, a key copper consumer,” said CRU analyst Craig Lang.
“The global copper market still faces the challenge of finding the additional supply required over the medium-to-longer term to meet the demand from renewable energy applications and electric vehicles.”
China’s central bank said on Monday it would cut the amount of cash that banks must hold in reserve, in the year’s second such move, releasing 1.2 trillion yuan ($188 billion) in long-term liquidity.
Meanwhile, concerns over supply tightness have been intensified by MMG Ltd’s decision to shut down production at Peru’s Las Bambas copper mine.
On-warrant LME copper inventories stand at 70,275 tonnes, down over 70% from August highs. ShFE stockpiles are at 36,110 tonnes, down 84% from May’s 229,179 tonnes.
Gains in the metal were, however, limited by uncertainties over the highly transmissible Omicron variant. But health experts, including top US infectious diseases official Anthony Fauci, said symptoms of the variant appeared to be mild.
China’s copper imports in November rose for a third straight month, customs data showed, hitting their highest since March, as demand for the metal rose after the easing of a power crunch that had dented industrial production.
Chinese tin smelter Gejiu Kaimeng Industry and Trade Co has started routine maintenance in a month-long overhaul that will take 600-700 tonnes of refined tin out of the market, the International Tin Association (ITA) said.
LME aluminium was up 0.7% at $2,605.5 a tonne, zinc rose 0.1% to $3,165.5, lead gained 0.3% to $2,207.75 a tonne and tin fell 0.7% to $38,455 a tonne.
ShFE aluminium slipped 0.5% to 18,790 yuan a tonne, nickel fell 0.8% to 146,800 yuan a tonne, lead rose 0.3% to 14,955 yuan a tonne and tin gained 0.5% to 284,010 yuan a tonne.