LONDON: Copper prices rose on Thursday as lower than expected growth from top consumer China stoked hopes for more support for the world’s second-largest economy.
Benchmark three-month copper on the London Metal Exchange (LME) was up 1.2% at $9,455 a tonne by 1627 GMT.
China’s growth in the second quarter undershot expectations in a Reuters poll owing to slowing manufacturing activity, higher raw material costs and new Covid-19 outbreaks.
“With the China data coming in a bit low ... some investors are saying that monetary policy will probably be more accommodative in the second half the year to support the Chinese economy,” said ING analyst Wenyu Yao.
Meanwhile, US Fed chairman Jerome Powell told Congress he saw no need to rush the shift towards tighter post-pandemic monetary policy, which bodes well for liquidity and metals demand.
China’s primary aluminium output fell for a second straight month in June, official data showed on Thursday, as limits on power consumption in the smelting hub of Yunnan reined in supply.
The discount of LME cash copper to the three-month contract expanded to $39.95 a tonne, its widest since August 2018, as on-warrant inventories in LME warehouses rose to 207,575 tonnes, their highest since May 2020.
The Yangshan copper premium climbed to $32.50 from $21.50 in June, which was its lowest since February 2016. This pointed to a rebound in demand for imported metal into China.
Freeport McMoRan will not proceed with plans to build a new copper smelter with China’s Tsingshan Holding Group, its local Indonesian unit, PT Freeport Indonesia’s spokesman told Reuters. LME aluminium fell 0.4% to $2,455 a tonne, zinc edged up 0.8% to $2,965, lead added 1.1% to $2,324, tin rose 1.2% to $33,060 and nickel was up 0.8% at $18,735.
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