Copper Rises on Prospects for Japanese Stimulus, U.S. Jobs Data

  • Mining stocks in America advance to highest level in a year
  • Nickel climbs on concern Philippine audit will hit production

Copper helped lead a rally of industrial metals as prospects for stimulus in Japan and better-than-estimated U.S. jobs data boosted the outlook for commodities demand. Mining stocks in the Americas rose to the highest in a year.

An election win by Japanese Prime Minister Shinzo Abe’s ruling coalition on Sunday raised speculation the government will spur growth through new spending. Better-than-expected U.S. payrolls figures on Friday also eased concerns about the U.S. economy.

“You have the potential for additional stimulus there in Japan, and the payrolls report was good, which sends a better signal that things aren’t falling apart,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “It’s adding to a bit of a risk-on bid, and that’s impacting base metals.”

Copper for delivery in three months climbed 0.8 percent to settle at $4,749 a metric ton ($2.15 a pound) at 5:51 p.m. on the London Metal Exchange, capping the first consecutive sessions of gains in a week.

The Bloomberg Americas Mining Index rose as much as 1.2 percent to the highest since May 2015. Gains were led by miners including First Quantum Minerals Ltd., Freeport-McMoRan Inc. and Teck Resources Ltd., which all climbed more than 3.5 percent.

Top Producer

Nickel was the biggest gainer on the LME, rising as much as 3.1 percent. The Philippines, the top producer of nickel ore, has put its suppliers on notice that any mines falling short of environmental standards will be shut down. In addition, Jinchuan Group Co., China’s biggest refiner, said Friday it may cut production by as much as 9 percent this year as smelters worldwide struggle with historically low prices.

If the Philippines’ “mining audit really hits production, then it will affect exports and that’s what the market is trading on right now until we have clearer confirmation,” Helen Lau, a Hong Kong-based analyst at Argonaut Securities (Asia) Ltd., said by phone. Jinchuan’s production forecast was also unexpected, she said.

In other metal news:

  • Copper futures for September delivery gained 1.3 percent to $2.1475 a pound on the Comex in New York.
  • On the LME, lead and tin also gained, while aluminum and zinc dropped.
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