Copper futures rose, snapping the longest slump in three months, as economic stimulus expanded in China, the world’s biggest user of industrial metals.
In the latest move to free up interest rates, China’s central bank will allow lenders to issue certificates of deposits to individuals and companies. The bank also added cheap funds to the finance system recently using a long-term lending tool, according to media reports on Monday and Tuesday. Copper slumped 5.5 percent last month on concern that growth in the Asian nation faltered.
“China is the biggest story for metals, so any kind of steps taken by the government is always positive for copper,” David Meger, the director of metal trading at High Ridge Futures LLC in Chicago, said in a telephone interview.
Copper futures for July delivery rose 0.6 percent to settle at $2.736 a pound at 1:20 p.m. on the Comex in New York. The metal dropped in the previous six sessions, the longest slump since March 3.
Prices also gained on speculation that the Federal Reserve may wait longer to raise interest rates amid mixed economic data. The dollar headed for the biggest drop in 10 weeks against a basket of 10 currencies, boosting the appeal of commodities as an investment.
“There is no consistency in the data, and more and more people are beginning to believe that the Fed may hold rates at this level longer than earlier estimated,” Meger said. “The dollar’s weakness is definitely helping metals.”
On the London Metal Exchange, copper for delivery in three months rose 0.3 percent to $6,040 a metric ton ($2.74 a pound). Zinc, tin and nickel advanced, while lead and aluminum declined.