Copper Advances on Speculation Central Banks to Issue StimulusJae Hur and Sungwoo Park
Copper climbed for a second day on speculation that central banks will extend monetary easing and as South Korea reported the fastest economic growth in two years. Aluminum and tin also advanced.
Copper for delivery in three months on the London Metal Exchange gained as much as 1 percent to $7,101 a metric ton and was at $7,042 by 4:28 p.m. in Tokyo. The metal rose 2.3 percent yesterday, the most since April 9. Futures for delivery in July on the Comex gained 0.9 percent to $3.192 per pound.
South Korea’s economy grew by a faster-than-estimated 0.9 percent last quarter as the government front-loaded spending. The Bank of Japan holds a policy meeting tomorrow and the European Central Bank may cut borrowing costs on May 2, according to a Bloomberg survey.
“Expectations for central bank stimulus measures helped copper extend the rally,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “Support also came from better-than-expected growth in South Korea and there’s some buying from China ahead of next week’s Labor Day holidays.”
Copper premiums paid by importers over the London Metal Exchange cash price were quoted at as much as $145 a ton on a cost, insurance and freight basis to Shanghai, Bonnie Liu, an analyst at Macquarie Group Ltd., said. “The premium should be able to reach $180 a ton,” Liu said, adding that South Korean and Singapore markets are also tight.
The contract for August delivery rose 1.3 percent to close at 51,280 yuan per ton ($8,312) on the Shanghai Futures Exchange. Markets in China, the world’s biggest consumer of industrial metals, will be closed from April 29 to May 1.
In Shanghai, copper’s aggregate trading volume and open interest rose to records in the past two days as prices fell to the lowest in three and a half years.