Copper Climbs as Chinese Growth Steadies, Stockpiles Ease

  • China’s industrial output rose, underpinning near-term outlook
  • Metal gains may be short-lived before Brexit vote: Danske Bank

Copper rose after two days of losses on evidence that Chinese growth is stabilizing and as concern over a buildup in metal stockpiles eased.

Official industrial production in China, the biggest metal user, rose 6 percent from a year earlier in May, matching economists’ estimates, suggesting that policy makers have underpinned the near-term outlook with monetary stimulus and fiscal support. Copper stockpiles tracked by the London Metal Exchange fell by 1.4 percent to 207,625 tons, the second consecutive drop and the biggest drop in three weeks.

“The Chinese industrial production data is not deteriorating and this is just good enough news for copper traders to join the dots together,” Naeem Aslam, chief market analyst at Think Forex U.K. Ltd. in London, said in an e-mail. “As long as the inventory data for copper shows that inventories are being drawn down, there is no reason among traders not to pile more bullish bets.”

Copper for three-month delivery gained 1 percent to settle at $4,557 a metric ton at 5:50 p.m. on the London Metal Exchange. It touched a four-month low of $4,483.50 on Thursday.

Any recovery in metal prices may be tempered as the prospect that the U.K. could leave the European Union hurts sentiment in financial markets, Jens Pedersen, an analyst at Danske Bank A/S in Copenhagen, said by e-mail. A poll last week showed a 10 percentage-point lead for Britain to leave the EU. The referendum takes place June 23.

In other metals and mining news:

  • Aluminum, tin and lead also gained on the LME, while zinc and nickel fell.
  • Copper futures for July delivery added 1.1 percent to $2.0535 a pound on the Comex in New York.
  • The Bloomberg Americas Mining Index rose for the first time in three days, gaining as much as 1.8 percent. Turquoise Hill Resources Ltd. surged the most intraday since October 2011 after the Sunday Times reported controlling shareholder Rio Tinto Group is looking to increase its stake.
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