Industrial Metals Rise After China Output Data, Cutback PlansBloomberg News
Aluminum leads metals higher on LME as zinc, nickel advance
China’s aluminum smelters pledged Friday to halt new mills
Industrial metals climbed after signs that growth has stabilized in China, the world’s biggest refined metals producer and consumer, and a series of announcements on production cutbacks in recent weeks.
Aluminum in London rose as much as 0.9 percent and traded 0.5 percent higher at $1,489 a metric ton at 3:11 p.m. in Shanghai, while copper was little changed after a 2 percent gain last week. The most-active copper contract in Shanghai rose 0.5 percent and closed at the highest level in a month.
China’s latest batch of economic data over the weekend showed fresh evidence of stabilization after policy makers unleashed several rounds of monetary and fiscal stimulus. Copper prices will recover next year as cutbacks and higher costs create a tighter market, according to Andrew Michelmore, chief executive officer of MMG Ltd.
“Metals were encouraged by the Chinese data over the weekend, while some bears covered their short positions,” Li Qi, a senior analyst at Cofco Futures Co., said by phone in Shanghai. Prices were also supported by smelters’ pledges to limit supply and rumors that China could step in and buy metals, Li said.
The rout in base metals prices has abated after mining cuts announced by Glencore Plc, Freeport-McMoRan Inc. and Anglo American Plc eased concerns that production surpluses will grow. China’s aluminum smelters pledged Friday to halt new mills and forecast that the nation’s idled aluminum capacity would rise by the end of the year.
Mining shares slumped as declines in U.S. and European equities on Friday spread to Asia. BHP Billiton Ltd., the biggest mining company, retreated 3.5 percent in Sydney while Rio Tinto Group slid 2 percent.
— With assistance by Alfred Cang