Metals and Miners Surge on Signs of Improving Global Demand

  • Zinc rises to highest in five years on the bourse in Shanghai
  • German business confidence advances to two-year high

Industrial metals surged and a gauge of mining-company shares jumped to a 15-month high as increasing profits at Chinese steelmakers and gains in global manufacturing boosted speculation that demand will improve. 

The listed unit of Baosteel Group Corp. swung to its largest profit in more than four years last quarter, boosted by a rebound in steel prices that’s aided producers worldwide. Business confidence in Germany rose to the highest in more than two years, while New York City construction spending is expected to climb to a record this year, according to reports Tuesday. Those came a day after data showing expansion at U.S. and German factories.

The data boosted metals from aluminum to zinc, helping propel mining shares globally. An index of 18 base-metals companies tracked by Bloomberg Intelligence surged as much as 3.2 percent to the highest since July 2015, with Glencore Plc and Vale SA among the best performers. Zinc, used to galvanize steel, had its biggest gain since July in London.

“We’ve had some good manufacturing data,” Tim Evans, the chief market strategist at Long Leaf Trading Group Inc. in Chicago, said in a telephone interview. “The metals market is obviously performing quite well.”

The Bloomberg Industrial Metals Sub-index rallied, paced by gains in zinc and aluminum. Zinc touched $2,376 a metric ton on the London Metal Exchange, the highest since Oct. 5, while aluminum climbed 2.4 percent to settle at $1,669 a ton at 5:51 p.m. local time. The increases were among the biggest Tuesday in the Bloomberg Commodity Index of 22 raw materials.

Nickel, used in stainless steel, also advanced in London, along with copper, lead and tin.

In China, major steelmakers boosted their average daily crude-steel output to 1.3 percent to 1.74 million tons since the end of September, Shenhua Futures said in note, citing figures from the China Iron & Steel Association. Zinc traded in Shanghai touched a five-year high, and iron-ore futures climbed by their limit in Dalian.

“Strong gains in China led by steel and iron ore are also supporting sentiment,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Hellerup, Denmark, said by e-mail.

— With assistance by Jasmine Ng, Martin Ritchie, Yuliya Fedorinova, and David M Levitt

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