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METALS-China stimulus hopes fuel gains; copper dips on inventory spike--2015Guangzhou int¡¯l non-ferrous metals exhibition
3/11/2015 non-ferrous metals expo |
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Most base metals climbed on Thursday on hopes for more stimulus measures in China after the top consumer cut its annual economic growth target, but copper dipped after inventories surged again, highlighting worries about oversupply.
Nearly all of the main contracts on the London Metal Exchange (LME) saw an uplift following news from China''s annual parliamentary meeting that the world''s second biggest economy plans to step up spending after reducing its growth target to 7 percent from 7.5 percent.
"The markets are up because it''s hope over reality," said Robin Bhar, head of metals research at Societe Generale.
"The reality is that China is slowing and the hope is that as it slows there has to be more accommodation in terms of fiscal, monetary moves for stimulus."
Three-month LME copper was one of only two contracts in the red, falling 0.1 percent to close at $5,835 a tonne.
This contrasted with gains in lead, ending 2.6 percent stronger at $1,820 a tonne, the highest in over two weeks, and tin, finishing 1.9 percent up at $18,140.
LME copper stocks MCUSTX-TOTAL surged by 10,250 tonnes to 318,375, the second consecutive big daily increase, bringing the rise so far this year to 80 percent.
Worries about a forecast global surplus and lukewarm Chinese physical demand helped drive copper prices down to the lowest levels in 5-1/2 years in January.
"The market chatter is that the increase in stocks may be a result of both the lack of a pick-up in demand but also some stocks that are coming out of financing deals in China," Bhar said.
A push by China to accelerate infrastructure projects appears designed to offset a struggling property market rather than to stimulate growth, but the net effect should be slightly more copper intensive, said analyst Daniel Morgan of UBS in Sydney. "In the very short term I see it (copper) as evenly balanced," he said.
In Japan, a major aluminium buyer has agreed to pay a producer a lower quarterly premium of $380 per tonne, a source said.
LME aluminium edged up 0.1 percent to close at $1,802 a tonne.
Nickel ended 1.8 percent firmer at $14,200 a tonne, extending Wednesday''s 2 percent rebound from the lowest levels in nearly 14 months despite another rise in LME stocks to a record high.
Traders said the modest increase in stocks of 168 tonnes MNISTX-TOTAL was overshadowed by 5,604 tonnes of stocks being cancelled, when owners of metal signal to the warehouse they wish to take future delivery, demonstrating increased demand.
Zinc finished down 0.5 percent at $2,020 a tonne.
-2015Guangzhou int¡¯l non-ferrous metals exhibition
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