LONDON: Copper rose on Tuesday to its highest in more than two months as the yuan rose against the dollar and on optimism for further stimulus measures for the property sector in China, the world’s largest copper consumer.
Three-month on the London Metal Exchange (LME) was last trading at $8,421 a metric ton at open outcry. It rose earlier to $8,486, the highest since Sept. 15.
Chinese regulators including the People’s Bank of China are drafting a “whitelist” lending support to 50 property developers, including state-backed China Vanke and fully private ones like Seazen and Longfor.
“The stronger yuan and the news of China’s government planning to help dozens of property developers are supporting the copper price,” a metals trader said. China’s major state-owned banks were seen exchanging yuan for dollars in the onshore swap market and selling those dollars in spot currency markets this week.
A stronger yuan against the dollar makes greenback-priced copper cheaper for the world’s biggest copper buyer. On the technical front, copper’s break through $8,465, the 200-day moving average could create further upside momentum, traders said.
“$8,500 is always going to be a big area on the bounce especially when you consider some of the heavy exchanges the market has seen around here at various points since late April,” brokerage Marex said at a note on Tuesday.
More supply disruptions from mines are also expected from MMG’s Las Bambas in Peru and First Quantum Minerals’ Cobre Panama.
Elsewhere, zinc prices fell to a two-week low of $2,526 a ton after LME data showed large deliveries to LME registered warehouses in Singapore. Zinc stocks in LME warehouses rose 9,300 tons to 142,750 tons. They have more than doubled since Nov. 15 and are at their highest since late August.
Last week Citi delivered over 60,000 tons of zinc in a profitable rent-sharing deal, according to sources. Zinc was last down 0.8% at $2,542 a ton. Support for zinc stands at $2,532, the 21-day moving average. In other metals, aluminium dropped 0.3% to $2,239 a ton, nickel edged down 0.8% to $16,820, lead eased 0.4% to $2,267 and tin rose 0.1% to $24,900.
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