Copper gains on China’s property support, softer dollar
Copper prices rose on Thursday as China’s supportive measures for its property sector, a weaker U.S. dollar and the prospect of the Federal Reserve slowing its pace of interest rate hikes boost sentiment.
Three-month copper on the London Metal Exchange CMCU3 was up 0.9% at $8,079.50 a tonne by 0251 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange SCFcv1 rose 0.3% to 65,130 yuan ($9,117.76) a tonne.
“Metals are higher from Chinese bank’s pledge for loans and interest-free terms to other banks for re-lending to developers,” a Singapore-based metals trader said.
“There’s definitely more upside in the near-term … low inventories and any small catalyst from China policy change will help push metals higher.”
Three of China’s biggest commercial banks have agreed to provide fundraising support to property developers, including industry giant Vanke, in a coordinated effort to support the country’s embattled property sector. The sector, which consumes a vast amount of metals, makes up about a quarter of China’s economy.
Meanwhile, the Fed minutes of its latest meeting showed a “substantial majority” of policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes.
The dollar =USD slipped to a one-week low against its rivals, making metals less expensive for non-dollar holders to buy the greenback-priced commodity. USD/
Chile state miner Codelco, the world’s top producer of copper, on Wednesday, disputed reports it intended to slash shipments to China next year amid worries over production.
Meanwhile, analysts expect China’s copper demand to rise strongly in 2023, helped by the production of electric vehicles and rising investment in renewable power projects.
Among other metals, LME aluminium CMAL3 gained 0.9% to $2,417.50 a tonne, lead CMPB3 rose 0.7% to $2,122, tin CMSN3 climbed 0.6% to $22,170 and zinc CMZN3 rose 0.9% to $2,933.50.
SHFE nickel SNIcv1 eased 0.7% to 199,850 yuan a tonne, lead SPBcv1 rose 0.3% to 15,735 yuan, tin SSNcv1 rose 0.4% to 183,300 yuan, zinc SZNcv1 gained 0.5% to 23,780 yuan and aluminium SAFcv1 rose 0.7% to 19,080 yuan.
Source:Reuters (Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V and Savio D’Souza)