- Metal producers said to mull reduction of 200,000 metric tons
- Prices still head for biggest monthly decline since January
Copper advanced in London as smelters in China propose to cut output next year, raising optimism the global glut will be curbed.
Smelters in China are proposing to reduce output by 200,000 metric tons in 2016, people with knowledge of the matter said Monday. A cut of that size would be 2.5 percent of the country’s 2014 refined copper production, according to data compiled by Bloomberg. In Japan, output of copper and copper alloy fabricated products fell for an eighth month in October, an industry group said, citing preliminary data.
The bulls believe the “production cut will kick in and support the market,” Richard Fu, the head of Asia & Pacific at Amalgamated Metal Trading Ltd., said in an e-mail.
Copper for delivery in three months gained 0.3 percent to settle at $4,586 a ton ($2.08 a pound) at 5:50 p.m. on the London Metal Exchange. Prices have slumped 27 percent this year as the Chinese economy grows at a slowest pace in a generation.
The metal has tumbled 10 percent in November, the biggest monthly drop since January. Goldman Sachs Group Inc. has said recent output cuts aren’t large enough to rescue prices, and that will require a substantial increase in Chinese demand. Shares of Freeport-McMoRan Inc., the world’s top publicly traded copper producer, have plunged 30 percent this month amid the rout in commodity prices.
Zinc, lead, nickel and tin also rose on the LME, while aluminum declined.
On the Comex in New York, copper futures for March delivery slipped 0.4 percent to $2.0485 a pound.