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
warehouses fell to a fresh 21-year low of 416,125 tonnes,
compared with nearly 2 million tonnes in March 2021.
Stocks in warehouses
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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