London copper eases on doubt over Chinese rebound
London copper fell on Monday after Chinese steps to strengthen its economic rebound raised doubts about the recovery in the world’s top metals consumer and second biggest economy.
China will cut the amount of cash that banks must hold as reserves, releasing around 1 trillion yuan in long-term liquidity to underpin its post-COVID economic recovery as it starts to lose momentum.
The news boosted industrial metals prices on Friday, but the rally faded on Monday in London.
“Many have put faith in a V-shaped recovery by the Chinese economy and this news rather dents that optimism. In some ways this is not actually bullish news as it seems to have been viewed by many,” said Malcolm Freeman, a director at UK brokerage Kingdom Futures.
Three-month copper on the London Metal Exchange CMCU3 fell 0.8% to $9,441 a tonne by 0649 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange SCFcv1 advanced 0.6% to 69,010 yuan a tonne.
* Chinese battery maker EVE Energy 300014.SZ said on Friday it would take a stake in a small lithium producer and establish a joint venture to build a lithium chemicals project costing up to 1.8 billion yuan.
* The GFG Alliance owned by tycoon Sanjeev Gupta said it had agreed a deal with commodities group Glencore GLEN.L to refinance the debt on its aluminium unit after GFG’s main lender collapsed in March.
* LME zinc CMZN3 fell 1% to $2,946 a tonne and nickel CMNI3 declined 0.9% to $18,585 a tonne.
* ShFE aluminium SAFcv1 advanced 1.4% to 19,055 yuan a tonne, nickel SNIcv1 increased 0.7% to 139,010 yuan a tonne and lead SPBcv1 rose 0.9% to 15,880 yuan a tonne.
* The discount of LME cash copper over the three-month contract CMCU0-3 expanded to $37.25 a tonne, its biggest since August 2018, indicating abundant immediate supply.
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Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu and Barbara Lewis)