London, March 5, reported that copper prices rose on Tuesday after China announced economic stimulus measures, including tax cuts for manufacturing, boosting demand prospects.
Meanwhile, U.S. State Penpeo said the United States and China are “about to” reach an agreement to end trade disputes. Since last summer, the dispute has led to a sharp drop in metal prices.
London Metal Exchange (LME) copper closed up 1.1% at $6,478 a tonne, reversing Monday’s decline and approaching a seven-month high of $6,540 hit on February 25.
With the overall cooling of economic growth, China’s economic stimulus measures, including infrastructure spending commitments, are largely unexpected. The Chinese government says its economic growth target for this year is 6-6.5%, down from 6.6% in 2018.
Warren Patterson, an analyst at ING, said China would have to shift from verbal promises to fulfilling its stimulus commitments in order for copper prices to really recover. He expects copper prices to average $6,400 a tonne in April-June and to rise later this year.
| http://www.pva-china.net |
Supporting copper prices is a sign of tight LME copper supply. LME copper stocks were 118,600 tons, the lowest since May 2008. The spot copper premium rose to a four-year high of $70 over the three-month copper premium.
However, during the seasonal stagnation of manufacturing activities during the winter and Lunar New Year holidays in China, stocks in warehouses on the Shanghai Futures Exchange (ShFE) more than doubled to 227,049 tons, and China’s import premium dropped from $120 in September to $55.50.
LME nickel closed up 3% at $13,650 a tonne and hit $13,725 in midday trading, the highest price since August.
Since early January last year, nickel stocks in registered warehouses on the London Metal Exchange have almost halved to 196,410 tons.
LME Aluminum closed down 0.1% at $1,874 per ton.
| PVA 1799 (PVA BF17) |
Zinc rose 1.1% to $2,780.
Lead fell 0.6% to $2,101.
Tin closed 0.5% higher at $21,565.