LONDON: Copper prices gained on Friday on optimism about more government support for the economy of top metals consumer China and as some investors bet that prices bottomed out earlier this month. Copper was headed for its first monthly increase since May, when prices hit a record of more than $11,100 a metric ton.
Three-month copper on the London Metal Exchange rose 0.9% to $9,328 per ton in official open-outcry trading, having gained 0.7% so far this month. Prices perked up after a report said that China is considering allowing homeowners to refinance as much as $5.4 trillion in mortgages to reduce borrowing costs.
“This could help support consumer confidence, which has been on the weak side, so that could boost consumption among households,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. China has been stepping up its efforts to support its troubled property sector, a major source of demand for industrial metals. The most-traded October copper contract on the Shanghai Futures Exchange ended day-time trade 0.1% higher at 74,220 yuan ($10,466.94) a ton, up 0.5% so far this month.
Physical demand for copper in China has been lacklustre, but Shanghai Metals Market noted significant increases in China’s copper wire and cable exports. Some investors have taken heart from gains since copper hit a 4-1/2 month low on Aug. 5, having slid 22% from the May record peak.
“It seems the tide has turned in the market, it has become a buy-on-dip market rather than a sell-into-strength market, which was the sentiment that prevailed for quite a few months,” Hansen said.
LME aluminium climbed 1.1% in official activity to $2,485 a ton, nickel edged up 0.1% to $17,025, zinc moved 1.3% higher to $2,914, lead advanced 1.5% to $2,066 and tin rose 0.6% to $32,545.
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