Copper rises on China stimulus hopes, higher inventories cap gains

Copper prices rose on Thursday, supported by a softer dollar and expectations of more economic support measures in top consumer China, but rising inventories capped gains.

Three-month copper on the London Metal Exchange (LME) CMCU3 rose 0.1% to $9,917.50 per metric ton by 0510 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 was also 0.1% higher at 79,950 yuan ($10,996.19) a ton.

Recent disappointing data in China raised hopes that Beijing will unveil more economic stimulus at a key political meeting over July 15-18.

“The prospect of easing monetary policy (in China)boosted sentiment in the base metals sector. However, signs of weak demand limited the gains,” ANZ analysts said in a note.

LME copper inventories MCUSTX-TOTAL were last at 195,475 tons, the highest since October 2021. Stocks rose the most in warehouses in South Korea and Taiwan, the closest delivery locations for exports from China, a usual netimporter.

The LME cash copper contract was trading at a $161.41 a ton discount to the three-month contract, the biggest discount since at least 1982, signalling abundance supply in the near term. MCU0-3

Nickel inventories also climbed in the LME warehouses and were last at 98,088 tons, the highest since January 2022, due to rising production from Indonesia and sluggishconsumption. MNISTX-TOTAL

Tin stockpiles in LME warehouses, however, fell to 4,450 tons, the lowest since April 23, due to lower supply from Indonesia.

LME aluminium CMAL3 rose 0.2% to $2,488 a ton, zinc CMZN3 advanced 0.7% to $2,986.50, lead CMPB3 climbed 0.8% to $2,196, tin CMSN3 increased 0.4% to $35,150 while nickel CMNI3 eased 0.1% to $16,870.

SHFE aluminium SAFcv1 dipped 0.1% to 20,230 yuan a ton, nickel SNIcv1 dropped 0.9% to 134,090 yuan, while zinc SNZcv1 rose 1.1% to 24,510 yuan, lead SPBcv1 increased 0.4% to 19,560 yuan and tin SSNcv1 jumped 1.3% to 281,740 yuan.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Eileen Soreng)