Copper climbed for a fourth session amid speculation that demand will stabilize in China as policy makers try to support growth in the world’s largest consumer of industrial metals. Zinc advanced to a one-week high.
Copper for delivery in three months on the London Metal Exchange climbed as much as 0.4 percent to $6,733 a metric ton, the highest price since June 6, and traded at $6,713 at 3:40 p.m. in Shanghai.
China’s central bank extended a reserve-requirement cut to some national lenders including China Merchants Bank Co. and Industrial Bank Co., as officials are trying to shore up an economy set for the weakest growth since 1990. Today’s gain for copper, the longest rally in three weeks, pared the metal’s drop this year to 8.8 percent.
“Copper prices closely follow the direction of China’s policy,” said Xu Liping, a Shanghai-based analyst at HNA Topwin Futures Co. “Prices were cheered up from recent moves by the central government to fuel the economy.”
China last week announced new steps aimed at bolstering slowing growth by cutting taxes, spending more on developing the Yangtze River region. Demand to use copper as collateral to get loans will continue in China despite a probe into metal stockpiled at Qingdao Port because of “relatively high” borrowing costs, Xu said.
Zinc advanced to $2,139 a ton, the highest since June 11, and last traded at $2,135. Global output of refined zinc was 4.3 million tons in the first four months of this year, trailing demand of 4.4 million tons, the International Lead & Zinc Study Group said June 16. LME-tracked stockpiles shrank to the lowest since December 2010, bourse data showed yesterday.
In Shanghai, metal for delivery in August closed little changed at 48,130 yuan ($7,726) a ton. The contract for September was little changed at $3.0565 a pound in New York.
On the LME, lead climbed, while aluminum, nickel and tin were little changed.