May 26, 2024

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Base metals advance as China demand outlook improves

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Prices of some base metals advanced on Monday, as better-than-expected economic data from China raised hopes of strong demand from the world’s biggest metal consumer.

Three-month aluminum on the London Metal Exchange was up 0.3% at $2,209 a tonne at 0719 GMT, nickel climbed 1.9% to $22,355 a tonne, zinc advanced 1.3% to $2,965.50 a tonne and tin rose 0.2% to $18,525 a tonne.

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The most-traded November copper contract on the Shanghai Futures Exchange closed 1.2% higher at 63,810 yuan ($8,792.16) a tonne and nickel climbed 1.2% to 187,220 yuan a tonne.

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China’s copper imports jumped 25.6% from a year earlier, with demand expected to benefit from more planned state spending on infrastructure.

“China’s commodity imports for September indicate continued improvement in apparent demand … Efforts to stimulate the economy through increased construction should support metals demand,” ANZ analysts said in a report.

“Copper imports were up strongly as outlook for demand from the power sector improves. This was supported by lower prices and a favorable import parity,” they added.

China’s exports in September beat forecast to rise 5.7% year-on-year, and the country’s industrial output growth also rose beyond expectations at 6.3% in the same period, pointing to a sustained recovery from COVID-19 curbs.

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BHP Group Chief Executive Officer Mike Henry said on Friday he was “cautiously optimistic” about the economic outlook for China, where there have been some green shoots in the property sectors, but uncertainty remained.

Copper inventories in SHFE warehouses surged 194% in the past three weeks to their highest levels since Aug. 4, raising some concerns about immediate demand.

LME copper fell 0.9% to $7,553.50 a tonne, while SHFE aluminum edged down 0.3% to 18,575 yuan a tonne, SHFE zinc declined 2.1% to 24,675 yuan a tonne and SHFE tin was down 1.2% at 165,010 yuan a tonne.

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($1 = 7.2576 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips)



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