Home Money & Commodities Copper gains on China stimulus; zinc slips on producer selling

Copper gains on China stimulus; zinc slips on producer selling

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LONDON: Copper prices rose on Monday on news of fresh stimulus measures in top metals consumer China and hopes for a US-China trade deal.
Other industrial metals, however, such as zinc, were dampened by the prospect of rising supply and producer selling.
China said on Monday it would relax residency curbs in many of its smaller cities and increase infrastructure spending to boost economic growth. On Sunday, China also announced measures to encourage financing for small and medium-sized businesses.
“Given those stimulus developments that we’ve seen over the weekend, the lack of an upward move across the board is quite telling. We feel the stimulus was already largely factored into the market and I think this reiterates it,” said Ross Strachan, senior commodities economist at Capital Economics in London.
Benchmark copper on the London Metal Exchange was up 0.9 percent at $6,459 a tonne by 1020 GMT, snapping two days of declines, but some other metals prices were in the red.
* ZINC PRODUCERS: Three-month LME zinc shed 1.1 percent to $2,889 a tonne, partly due to producers seeking to lock in high prices through hedging programmes, said Alastair Munro at broker Marex Spectron. “There was evidence of a producer offer via the forward curve,” he said in a note.
* ZINC STOCKS: On-warrant LME zinc inventories <MZNSTX-TOTAL> rose 6 percent to 46,725 tonnes after touching record lows in late March, according to daily LME data on Monday, helping to alleviate shortages.
* ZINC OUTLOOK: Strachan said although the refined zinc market was experiencing shortages currently, strong mine output would soon filter into the refined market.
“I think zinc is the metal that probably has the most downside potential. It’s clearly got more genuine tightness than some of the other metals, but the supply growth that is coming there should rather shift that picture sooner rather than later.”
LME zinc touched a nine-month peak last week and has gained 17 percent so far this year.
* US-CHINA TRADE: The US Trade Representative said significant work remains ahead of fresh talks due this week, while Chinese state media said the two sides had made “new progress” in the talks.
“This Chinese comment may well have triggered some of the metals buying,” said Malcolm Freeman, director and chief executive of Kingdom Futures in a note.
* PERU: MMG Ltd said its Las Bambas copper mine in Peru is expected to resume normal operations after an indigenous village agreed to end a two-month blockade.
* PRICES: LME aluminium slipped 0.3 percent to $1,884 a tonne, nickel gained 1 percent to $13,255, lead added 0.6 percent to $1,997 and tin dropped 0.8 percent to $20,830.