Copper climbs on Chinese property, infrastructure gains

• Copper prices gained on Friday after positive Chinese data on property and infrastructure growth.
• Industrial metals prices were volatile after China's economic growth slowed slightly.
• zinc rose 0.7pc in official rings to $2,456 a tonne after touching $2,464.50, the highest since July 30.

LONDON: Copper prices gained on Friday after positive Chinese data on property and infrastructure growth, while zinc and lead hit multi-month highs as investors worried about shortages.

Industrial metals prices were volatile after China's economic growth slowed slightly more than expected to 6% year-on-year in the third quarter, the weakest pace in almost three decades.

Prices headed higher, though, as investors digested the data, which also showed China's property investment grew 10.5% in the first nine months of 2019, infrastructure investment rose 4.5% and industrial output outpaced forecasts at 5.8% in September.

"There was a slight re-acceleration in property new starts growth, which is quite an important signal given a lot of pessimism about the Chinese property sector," said Nicholas Snowdon, an analyst at Deutsche Bank in London.

"There was also a slight pickup in infrastructure investment growth, so the two key drivers of on-shore metals demand were slightly on the positive side, but they're nothing to get too carried away about."

A Singapore-based metals trader said China was likely to roll out further stimulus measures in sectors such as real estate and infrastructure to boost growth in the fourth quarter.

Three-month copper on the London Metal Exchange (LME) gained 0.6% to $5,774 a tonne in official open-outcry trading after edging up 0.2% a day earlier.

* ZINC: LME benchmark zinc rose 0.7% in official rings to $2,456 a tonne after touching $2,464.50, the highest since July 30.

Some analysts have pointed to smelter shutdowns as tightening supply, but Snowdon said that was not the only driver.

"I think demand has held up better than expected, and that's supported refined imports at a higher level than would have been anticipated and in turn why the ex-China markets are staying tight," he said.

* LEAD SPREAD: The premium of LME cash lead over the three month contract surged to $21.75 a tonne by Thursday's close, the highest since August and up from $8 a day earlier, indicating tight nearby supplies in LME warehouses.

The shortages were also linked to a large position, traders said, after LME data showed one party held 80-89% of available inventories and short-term futures.

LME lead added 0.1% in official trading to $2,193 a tonne, having touched $2,203.50, the highest since July last year.

* CHINA ALUMINIUM: China's aluminium production fell 1.6% from a year earlier amid ongoing outages at two key smelters.

* TIN OUTLOOK: China's refined tin output in January-September dropped 9.5pc year-on-year and is seen falling further until November.

* PRICES: LME aluminium failed to trade in official rings, but was bid up 0.2pc to $1,730 a tonne, nickel was bid up 0.3pc to $16,325 and tin shed 1.6pc to trade at $16,875.