LONDON: Copper prices edged up on Thursday, buoyed by expectations for higher demand on the back of an injection of stimulus from top metals consumer China.
The Chinese cabinet said that China will use timely cuts in banks’ reserve requirement ratios and other policy tools to support the world’s second-biggest economy in the face of the latest COVID-19 outbreak.
China, which accounts for nearly half of global copper consumption estimated at 24 million tonnes, is scrambling to contain a COVID-19 outbreak that 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 aggressively than previously expected.” Benchmark three-month copper on the London Metal Exchange (LME) added 0.2% to $10,318 a tonne by 1600 GMT.
CHINA DEMAND: Analysts at ANZ said its copper demand indicator showed that consumption was holding up well thanks to a pick-up in the power sector.
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.
CHILE: The Chilean Copper Commission (Cochilco) on Thursday raised its projection for 2022 copper prices to $4.40 per pound, amid a perceived scarcity due to the Russia-Ukraine conflict.
ZINC: Prices for zinc fell 0.7% to $4,430 a tonne on profit-taking after supply concerns and low inventories boosted it to its highest in moer than a month.
OTHER METALS: LME aluminium rose 1.6% to $3,288 a tonne, zinc lost 1.1% to $4,411, lead firmed by 0.1% to $2,436, tin was down 0.5% at $43,105 and nickel gained 0.4% to $33,110.