Copper and aluminum bounce on upbeat China factory, auto data

Author of the article: LONDON — Copper and aluminum prices rebounded on Wednesday as investors bet that better-than-expected economic data from top metals consumer China foreshadowed an uptick in demand. Three-month aluminum on the London Metal Exchange was up 0.4% to $2,579 a tonne at 1400 GMT after slipping 2.2% on Tuesday and hitting its…
Copper and aluminum bounce on upbeat China factory, auto data

Author of the article:

LONDON — Copper and aluminum prices

rebounded on Wednesday as investors bet that

better-than-expected economic data from top metals consumer

China foreshadowed an uptick in demand.

Three-month aluminum on the London Metal Exchange

was up 0.4% to $2,579 a tonne at 1400 GMT after slipping 2.2% on

Tuesday and hitting its lowest level since Nov. 10.

LME aluminum has shed 37% since hitting a record high of

$4,073.50 on March 7.

“We’re seeing some of the Chinese numbers improving and I

think the worst is over. We could see some volatility, but

overall the broad trend is geared towards recovery,” said Xiao

Fu, head of commodity market strategy at Bank of China

International in London.

“The question is how far the rally can go. There seems to be

a cap on the upside for now because of the rate hikes by global

central banks and worry about slower economic growth globally.”

LME copper edged up 0.1% to $9,238 a tonne.

China’s economy showed signs of recovery in May after

slumping in the prior month as industrial production rose

unexpectedly, while car sales jumped 54% in the week of June 6

versus the same period in May.

“The industrial production beat suggests China has become

very agile at keeping the export engines revving despite

mobility restrictions,” said Stephen Innes, managing partner at

SPI Asset Management.

* Also supporting metals was a weaker dollar index ,

making commodities priced in the U.S. currency cheaper for

buyers using other currencies.

* China’s monthly production of aluminum reached a record

high in May following easing in power consumption curbs and as

COVID-19-induced lockdowns had little impact on output.

* Aluminum stocks in LME-registered

warehouses fell to a fresh 21-year low of 416,125 tonnes,

compared with nearly 2 million tonnes in March 2021.

Stocks in warehouses monitored by the Shanghai

Futures Exchange have dropped more than 20% since the middle of

March to 269,583 tonnes.

* LME zinc gained 1.9% to $3,664 a tonne, lead

climbed 1.2% to $2,100, nickel jumped 4.9% to

$26,495 and tin advanced 3.6% to $32,200.

($1 = 6.7231 Chinese yuan)

(Additional reporting by Brijesh Patel in Bengaluru

Editing by Kirsten Donovan and Mark Potter)

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