Saturday, December 4

Copper jumps 3% as markets cheer Evergrande deal


Article content

LONDON — Copper prices shot up 3% on Wednesday on relief that China’s debt-burdened Evergrande would pay interest on a domestic bond, easing fears that the property giant’s troubles might hit the global economy.

Three-month copper on the London Metal Exchange had climbed 3.4% to $9,277 a tonne by 1000 GMT, reversing losses from the previous session when the contract went as low as $8,810 a tonne, its weakest since Aug. 19.

An Evergrande unit said it would make a bond interest payment on Sept. 23 after private negotiations with bondholders.

Article content

“That heartened markets for the time being and we’re running into some dip buying. Consumers are probably running short of inventory, so these prices may prompt restocking,” said independent consultant Robin Bhar.

“I think the consensus is that this is not China’s Lehman moment. When it comes to China, everyone owns part of the problem and at the end of the day, it’s all part of China plc. They’re not going to let it disrupt the economy.”

Risk sentiment was also supported by the People’s Bank of China injecting more liquidity into the market to replace certain expiring loans.

The most-traded October copper contract on the Shanghai Futures Exchange closed down 0.9% at 68,780 yuan ($10,636.19) a tonne, catching up with losses in London during the previous two sessions when Chinese markets were closed for a public holiday.

Article content

* LME aluminum climbed 1.7% to $2,894.50 a tonne, nickel rose 1.1% to $19,030, zinc advanced 1.5% to $3,024, tin jumped 3.9% to $35,150, but lead fell 0.4% to $2,125.

* A Chilean court handed a reprieve to BHP’s Cerro Colorado copper mine, agreeing to suspend a ban on it pumping water from an aquifer for 90 days.

* Peru wants to revise the framework for the country’s mining industry, redrafting the umbrella law that regulates the sector, as well as the legislation that sets royalty payments.

* Jiaozuo Wanfang Aluminum Manufacturing Co Ltd in central China’s Henan province said primary aluminum output affected by floods would resume by the middle of November.

* For the top stories in metals and other news, click or ($1 = 6.4666 yuan) (Reporting by Eric Onstad in London and Mai Nguyen in Hanoi; Editing by Devika Syamnath and David Clarke)



financialpost.com