LONDON: Prices of copper and aluminium rose on Tuesday as economic stimulus measures by top metals consumer China spurred a recovery after a bout of profit-taking drove both metals to losses in the previous session.
Three-month copper on the London Metal Exchange (LME) were up 0.5% at $9,880 a metric ton in official open-outcry trading while aluminium gained 0.7% to $2,630.
Copper hit $10,158 a ton, its highest since early June, on Monday before falling as investors reshuffled their positions ahead of China’s Oct. 1-7 holiday. Aluminium touched $2,659 last week for its highest since June 6.
“The feedback this week is that moves on these metals have been so substantial that current levels are not justified by fundamentals,” said Alastair Munro, senior base metals strategist at brokerage Marex. “However, this is all about money flows, with systematic buyers covering shorts in the likes of nickel and lead whilst the wider markets had gotten so underinvested in our space that those inflows can be substantial and outweigh any supply and demand outlook.”
The holiday in China made for thin trade on Tuesday while the LME Week annual gathering of metals industry participants, continued in London.
Investor allocations to the metals sector has big potential to grow as the energy transition takes hold in the coming years, an LME event heard on Monday. In other metals, LME nickel advanced 0.5% to $17,600 a ton in official activity after hitting $17,795 for its highest since June 14.
Top nickel producer China’s Tsingshan cut ferronickel production in Indonesia because of persistent shortages of ore, sources told Reuters. Zinc, meanwhile, added 1.6% to $3,139, lead climbed 1% to $2,117 and tin fell 0.2% to $33,400.
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