Copper Has Best Rally Since October as Miners Give Up Gainsby
Anglo American erases advances; Freeport shares plunge
Metals traders set to close out bearish bets, RBC says
Copper had the biggest weekly increase since October on speculation that central banks will do more to counter market turmoil around the world.
Most commodity markets advanced, with crude oil in New York poised for the biggest two-day jump since 2008. Stagnating global economies sent prices of metals and energy tumbling earlier this year on demand concerns. The European Central Bank this week signaled it’s ready to do more to shore up growth, easing global market turmoil and adding to speculation that policy makers in other nations will also bolster expansion.
"Surging oil has given some respite to a rather gloomy global financial picture of late," RBC Capital Markets Ltd. said in a note. “Sellers are exhausted” and a reasonable amount of short-covering, or closing out bearish bets, may be imminent, it said.
The gains in commodities weren’t enough to help rescue mining companies that are suffering from metal prices that dropped to multi-year lows earlier this month. Shares of Anglo American Plc dropped as much as 10 percent in London, erasing earlier gains. Freeport-McMoRan Inc, the biggest publicly traded copper producer, lost as much as 12 percent.
Copper futures for March delivery added 0.3 percent to settle at $2.0025 a pound at 1:14 p.m. on the Comex in New York, taking this week’s gain to 3 percent this week, the most since Oct. 9.
On the London Metal Exchange, copper, zinc and tin rose, while lead, aluminum and nickel declined.
China is turning to market-based liquidity measures to ease a pre-Chinese New Year cash squeeze and offset capital outflows stemming from its support for the falling yuan.
Copper “has been oversold on expectations that the growth rate in China was going to be significantly lower,” Jeffrey Nichols, a New York-based senior economic adviser to Rosland Capital, said in a telephone interview. “Now, there’s some relief that People’s Bank Of China will come and provide more stimulus.”