Copper futures capped the longest rally in five weeks as easing inflation bolstered the case for more economic stimulus in China, the world’s biggest metal consumer.
Consumer prices rose 1.2 percent in May, Chinese government data showed Tuesday. That compared with the 1.3 percent median estimate in a Bloomberg survey and the 1.5 percent gain in April. The producer-price index fell 4.6 percent. Copper posted a third straight gain, the longest streak since May 1.
“Inflation indicators signaled that policy makers have the latitude to introduce more stimulus measures without having inflation scares at this point,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “The metal market is betting we’ll see additional policy measures introduced in the future just to help out an economy that appears to be bottoming.”
Copper futures for July delivery increased 0.6 percent to settle at $2.714 a pound at 1:16 p.m. on the Comex in New York, the biggest increase in more than two weeks.
China’s imports of oil, copper and iron ore dropped last month amid a broader slowdown that highlights the country’s weakening economy, data showed Monday.
Copper for delivery in three months rose 0.3 percent to $5,965 a metric ton ($2.71 a pound) on the London Metal Exchange. Zinc, lead and nickel gained, while tin fell. Aluminum was unchanged for a second straight day.