- Prices up 3.4% in two days, biggest such gain since November
- Demand for metals is looking better, Dragosits of TD says
Aluminum capped the biggest two-day gain since November as Chinese leaders pledged to boost demand in the Asian nation’s flagging economy. Other industrial metals also rose.
Data Tuesday showed Chinese imports of zinc surging in December to the highest since May 2009, while copper shipments rose to the highest since at least 2008, as buyers snapped up metal in anticipation of further weakness in the yuan. The nation must reduce excessive capacity while expanding aggregate demand, according to a state television report citing President Xi Jinping on the same day.
“Imports were very strong for all metals, and that suggests to us potentially we’re starting to see a turnaround to the restocking cycle in China,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “That’s helped to boost the demand-side symptoms of the metals.”
Aluminum for delivery in three months climbed 2.1 percent to settle at $1,526 a metric ton at 5:50 p.m. on the London Metal Exchange. Prices gained 3.4 percent in two days, the biggest such gain since Nov. 26.
Alcoa Inc., which is spinning off aluminum assets later this year, says global demand for the metal will exceed production this year by a record 1.2 million metric tons, forcing car and appliance makers to draw down inventories.
- Copper, tin, lead and zinc also rose on the LME, while nickel fell. Copper futures for March delivery gained 1.3 percent to $2.064 a pound on the Comex in New York.
- The London Metal Exchange Index of six industrial metals gained 2.5 percent on Tuesday, its biggest increase since mid-December.
- Antofagasta Plc, the copper miner controlled by Chile’s richest family, plans to boost production of the metal this year by as much as 17 percent after missing its 2015 output target.