Copper prices gained on Wednesday as China’s stimulus measures brightened demand prospects, while rising oil prices due to the escalating Middle East conflict also lent support to the market.
Three-month copper on the London Metal Exchange (LME) rose 0.1% to $9,986.50 per metric ton by 0724 GMT, aluminium edged up 0.3% at $2,655.50 and nickel climbed 1.2% to $17,930.
LME zinc increased 0.5% to $3,163.50, lead advanced 0.6% to $2,121 a ton, while tin eased 0.2% to $33,800.
“Up is the path of least resistance at the moment. Technicals support it, and sentiment does too. And, if Iran and Israel go to a full-scale war, that would give metals a push up too,” said a broker.
Israel and the United States promised to retaliate against Iran after Tehran’s missile attack against Israel this week, raising fears of a wider conflict in the region and pushing oil prices higher.
A disruption in oil supply from the Middle East, a key producing region, will raise costs to produce and transport many commodities including metals.
China has rolled out a slew of policies to boost economic growth, from lowering interest rates to trimming mortgage rates and relaxing home purchase restrictions.
China accounts for half of the world’s metals consumption.
Copper and aluminium rebound in thin Chinese holiday trade
Trading volumes on Wednesday were thin as China and India, one of Asia’s fastest growing metals markets, were closed for holidays.
Higher metals prices could also deter physical demand.
The discount of LME cash zinc contract to the three-month contract tightened to $28.48 a ton on Tuesday, the smallest discount since May 2.
The global refined zinc market could see a 164,000-ton deficit in 2024 due to reduced output in Europe and elsewhere, rather than a surplus as forecast previously, the International Lead and Zinc Study Group said on Monday.
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