- Nickel rises as aluminum, lead and tin decline on LME
- Global index of mining shares fall for second straight day
Copper gained for a second day amid optimism that increased stimulus from China will bolster demand.
The Asian nation, the world’s biggest buyer of the metal, cut borrowing costs on some assets used to add funds to the banking system for the first time since August. The move follows a lending-rate reduction last week as China tries to jump start an economy that expanded at the slowest pace in six years last quarter.
A Bloomberg gauge of industrial metals has slumped 21 percent this year as a slackening in China’s economy cut demand and signaled worsening gluts. The country consumes about 40 percent of the world’s copper.
“There’s definitely going to be more stimulus in China, and they’re going to artificially inflate the market,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “They have a lot of money to do it.”
Copper for delivery in three months gained 0.6 percent to settle at $5,220 a metric ton ($2.37 a pound) at 5:51 p.m. on the London Metal Exchange. Nickel also rose, while aluminum lead and tin declined on the LME. Zinc closed unchanged.
On the Comex in New York, copper futures for December delivery added 0.2 percent $2.362 a pound.
“We would expect copper prices to be ticking up a bit, as the market has over-reacted to a slowdown in China,” Caroline Bain, a senior commodities economist at Capital Economics Ltd. in London, said by telephone. “The fact that China has stepped in to lower rates should be seen as a positive for the metals.”
The Bloomberg World Mining Index dropped as much as 1.8 percent on Tuesday, a second straight loss. The gauge has tumbled 24 percent this year as tumbling metal prices erode producer profits.