LONDON: Copper and other industrial metals pushed higher on Tuesday on hopes that top metals consumer China would unleash more stimulus to boost its economy.
Three-month copper on the London Metal Exchange added 0.4% to stand at $8,386 per metric ton in official open-outcry trading after edging lower on Monday.
China’s cabinet on Monday pledged more fund injections in the capital market to stabilise market confidence. One option included mobilising about 2 trillion yuan to stabilise the slumping stock market, Bloomberg News reported.
“The speculation about life support to the stock market is aiding sentiment. It’s got the renminbi trading stronger and that’s feeding through to some better price action,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Positive technical signals were also in place as copper has broken above both the 200-day moving average and a downtrend in place since Dec. 28, when it touched the highest in nearly five months, he added.
However, a trader said the metals price rally is unlikely to be sustained amid the absence of a stimulus package that directly pumps up metals consumption.
US Comex copper futures were up 0.6% at $3.79 a lb. Also supporting the metals market was a softer dollar index, making greenback-priced metals less expensive to buy for holders of other currencies.
LME aluminium rose 1.2% to $2,185 a metric ton, zinc climbed 1.9% to $2,504 and nickel advanced 1.5% to $16,250. Lead gained 1.3% to $2,152.50, the highest in nearly two months, while tin jumped 2.1% to a four-month peak of $26,155.
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