Copper set for second weekly gain as China measures lift appetite

9th June 2023

By: Reuters


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BEIJING - Prices of copper held steady on Friday, although the contract was on track for a second consecutive weekly gain as top metal consumer China rolled out measures to support its economy, while a weaker dollar also provided some relief.

Three-month copper on the London Metal Exchange was flat at $8 346 a metric ton by 01:42 GMT. The contract has risen 1.3% so far this week.

Investor sentiment was aided by China's financial boost and its decision to launch a nationwide campaign to promote automobile purchases and shore up demand in the world's largest auto market.

The move marks the latest measure by authorities to boost spending on big-ticket items, which have bucked a tepid rebound in overall consumption after China abruptly ended COVID-19 containment measures late last year.

Data released this week signalled better performance in the auto and new energy sectors, fuelling hopes of strong metals demand.

Sales of passenger vehicle in China totalled 1.76-million vehicles in May, up 28.2% from a year ago, according to the China Passenger Car Association (CPCA).

China's solar-related output such as polysilicon and batteries surpassed an annual growth of 72%, data by Ministry of Industry and Information Technology showed, boosting demand for aluminium.

Still, LME aluminium was listless at $2 253.50 a metric ton.

Power supply in China's southwestern Yunnan province, the country's fourth-biggest aluminium-producing region, is expected to improve with more rainfall this month. However, the level of water reservoir is still tight and producers will not resume their production at least for the early period this month, according to a survey by Shanghai Metals Market.

The dollar retreated on Friday, making it more attractive to buy the greenback-priced commodity.

The most-traded July copper contract on the Shanghai Futures Exchange SCFcv1 was up 0.1% at 66 840 yuan ($9 398.07) a metric ton.

LME lead CMPB3 added 0.3% to $2 044, and nickel CMNI3 nudged 0.1% up to $21 150, while tin CMSN3 rose 1.1% to $26 100, zinc CMZN3 shed 0.4% to $2 399.50.

SHFE aluminium SAFcv1 added 1% to 18 365 yuan a metric ton, zinc SZNcv1 was up 0.5% at 19 875 yuan, nickel SNIcv1 fell 1.2% to 159 020 yuan, while tin SSNcv1 rose 2.8% at 213 600 yuan.

Edited by Reuters




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