Thursday, February 2

Copper rises on tight supply, China’s pledge to support economy


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BEIJING — London copper prices climbed on Monday, supported by top metals consumer China’s pledge to stabilize its COVID-ravaged economy and as tight global stockpiles fueled supply concerns.

Three-month copper on the London Metal Exchange was up 1.1% at $8,358.50 a tonne, as of 0838 GMT.

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China will focus on stabilizing its $17-trillion economy in 2023 and step up policy adjustments to ensure key targets are hit, said a statement last Friday following an agenda-setting meeting attended by President Xi Jinping and his senior officials.

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More policy easing should stabilize the property sector, said Wang Tao, Head of Asia Economics and Chief China Economist of UBS Investment Bank Research.

“We expect more support to come, including further lowering of Mortgage rates and down-payment requirements, relaxation of home purchase restrictions, and more credit support for stalled projects,” Wang said.

Supply concerns also lent some support, traders said.

Canada-based miner First Quantum Minerals said on Friday it is going through “all available legal means” after the Panamanian government ordered it to pause operations at its flagship copper mine over a payments dispute.

Copper inventories in warehouses monitored by SHFE fell 18.5% week-on-week to 64,041 tons last Friday.

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Copper stocks on the LME warehouses ticked 375 tons higher to 84,100 tons last Friday, but were more than halved from 180,925 tons seen in May.

Still, fast spreading infections in China after the government relaxed strict anti-virus controls fueled worries over the impact on near-term manufacturing activities.

The country reported its first COVID-related deaths in weeks on Monday.

The most-traded January copper contract on the Shanghai Futures Exchange dipped 0.5% at 65,110 yuan ($9,336.51) a tonne.

Also weighing on sentiment was a hawkish US Federal Reserve that lead to fears that longer interest rate hikes would exacerbate demand for metals.

Among other metals, LME aluminum climbed 0.5% at $2,386.50 a tonne, zinc added 0.6% to $3,036.50, lead edged 0.1% up to $2,153, while tin eased 0.6% to $23,390.

SHFE aluminum was down 1.1% at 18,540 yuan a tonne, tin slipped 2.5% to 187,500 yuan, zinc fell 1.9% to 23,790 yuan and nickel retreated by 1.8% to 213,730 yuan.

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($1 = 6.9737 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Sherry Jacob-Phillips and David Goodman )



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