LONDON: Copper prices inched up on Thursday on expectations for higher demand from an injection of stimulus from top metals consumer China.
The Chinese cabinet said China will use timely cuts in banks’ reserve requirement ratios and other policy tools to support the world’s second-biggest economy, as headwinds increase amid COVID-19 outbreaks.
China will use timely RRR cuts to support economy, cabinet says
China, which accounts for nearly half of global copper consumption estimated at 24 million tonnes, is scrambling to contain an breakout of COVID-19 which threatens to sap economic growth and disrupt supply chains.
“Chinese policymakers vowed to come up with more stimulus and that is supporting prices,” said ING analyst Wenyu Yao.
“COVID is disrupting economic activity and officials are under pressure to achieve growth targets this year, giving them leeway to stimulate more aggressive than previously expected.”
Benchmark three-month copper on the London Metal Exchange (LME) added 0.2% to $10,310 per tonne by 1130 GMT.
China Demand: Analysts at ANZ said its copper demand indicator showed that consumption was holding up well due to a pick-up in the power sector.
“This is within a better growth impulse in China, as the government looks to support economic activity,” the bank said.
Zinc soars as smelters duel rising costs, inventories fall
Inventories: Copper stocks in LME-approved warehouses are down 17% this year. The latest LME data showed that they rose 3,675 tonnes to 110,675 tonnes.
Zinc: Prices for the metal fell 0.7% to $4,430 a tonne on profit-taking after supply concerns and low inventories boosted it to its highest in over a month.
Other Metals: LME aluminium rose 1.5% to $3,283 a tonne, zinc lost 0.6% to $4,434, lead rose 0.1% to $2,436, tin was up 0.2% to $43,425 while nickel was steady at $32,970.
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