Copper Set for Weekly Gain as China Plans Capacity Reduction
Copper was poised for a weekly advance as China, the biggest user, plans to eliminate obsolete production capacity.
Copper for delivery in three months was little changed at $7,016.75 a metric ton at 10:22 a.m. in Shanghai and has gained 1.5 percent this week. Aluminum was also little changed at $1,825 a ton.
China’s industry ministry ordered more than 1,400 companies in 19 industries, including aluminum and copper, to cut production capacity this year, according to a statement on its website yesterday. Canceled warrants, or orders to remove copper from LME warehouses, fell to 316,625 tons yesterday, the lowest since June 21, while those in Asia slid to 194,925 tons, the lowest since June 24.
“It’ll take some time before the market can see why this capacity elimination is different from previous efforts and won’t lead to further additions of new capacity,” said Xiong Dabiao, an analyst at Minmetals Futures Co. in Shanghai. “Slow industrial activity continues to weigh on prices.”
Copper for delivery in November on the Shanghai Futures Exchange fell 0.2 percent to 50,400 yuan ($8,218) a ton. Metal for delivery in September on the Comex was little changed at $3.1855 a pound. On the LME, zinc, lead, nickel and tin were also little changed.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at firstname.lastname@example.org