China stimulus propels London copper, zinc to around 4-month highs

London copper and zinc prices hit their highest in around four months on Monday after a series of stimulus measures from top metals consumer China boosted demand prospects.

Three-month copper on the London Metal Exchange (LME) CMCU3 rose 0.6% to $10,038.50 per metric ton by 0726 GMT. It hit $10,158 earlier in the session, the highest since June 7, and was set for the best monthly gain since April.

The most-traded November copper contract on the Shanghai Futures Exchange SCFcv1 closed up 0.3% to 78,830 yuan ($11,241.35) a ton. It earlier hit its highest level since July 16 at 79,460 yuan and posted its best monthly gain since April.

This month, China released a slew of measures to support its economy, including lowering interest and mortgage rates, injecting liquidity into banks and easing home purchase restrictions.

“People are going into LME Week very bullish. The concentrate supply story will definitely be talked about. Whatever the actual demand might be, (some) people are caught short,” said a trader, referring to the tightness in mined copper supply that has been supporting prices.

LME Week, the annual gathering in London of metals industry participants, starts on Monday.

SHFE zinc SZNcv1 rose 0.4% to 25,120 yuan a ton, having hit its highest since May 30 at 25,380 yuan earlier in the session. LME zinc CMZN3 rose 0.7% to $3,110.50, having earlier climbed to a level unseen since May 29 at $3,130.

Zinc is mostly used in the construction sector.

LME aluminium CMAL3 eased 0.2% to $2,642 a ton, nickel CMNI3 increased 1.3% to $17,220, tin CMSN3 climbed 1.1% to $33,270, and lead CMPB3 edged up 0.5% to $2,131.

SHFE aluminium SAFcv1 rose 0.5% to 20,460 yuan a ton, nickel SNIcv1 climbed 3.2% to 132,900 yuan, lead SPBcv1 was up 1.1% at 17,055 yuan and tin SSNcv1 jumped 3% to 265,160 yuan.

The price upside looks limited due to weak Chinese manufacturing data released on Monday, said Sandeep Daga, a director at Metal Intelligence Centre.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu, Eileen Soreng and Mrigank Dhaniwala)