Copper prices rose, capping the biggest two-day rally in 15 months, on speculation that economic stimulus will spur demand in China, the world’s top consumer of industrial metals. Aluminum to zinc also gained.
China’s central bank granted $50 billion yuan ($8.1 billion) of relending quotas as support for micro businesses and the agricultural industry, and a government commission approved a plan to build urban rail networks in Jinan, Shandong province. In two days, copper climbed 3 percent, the most since Sept. 19, 2013. On Jan. 14, the price plunged to a five-year low.
“We’re severely oversold, and we’re starting to see the market stabilize,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Psychologically, the fact that China is out there providing assistance supports copper.”
Copper for delivery in three months rose 1.5 percent to close at $5,715 a metric ton ($2.59 a pound) at 5:50 p.m. on the London Metal Exchange. That marked the biggest gain since Dec. 1. Lead, nickel and tin also climbed.
This week, copper tumbled 6.2 percent, the most in three years, amid concern that demand will wane. On Jan. 14, the price tumbled 5.3 percent, the biggest drop since October 2011, after the World Bank cut its forecast for the global economy amid weakness in Asia and Europe.
Copper futures for March delivery rose 2.3 percent to $2.617 a pound on the Comex in New York.
Supplies are “heading into 2015 looking much tighter than initially thought,” Standard Bank Plc said in a report. “Expected losses and disruptions are already mounting.”