European copper hits 3 week high on brighter China demand prospects
Reuters reported that copper hit a three-week high on Wednesday, lifting European mining shares in its wake, as recent economic indicators in top copper user China pointed to brighter demand prospects.
China's factory output and retail sales increased faster than expected in August amid strong housing market and government infrastructure spending, data showed.
Data showed Chinese banks extended 948.7billion yuan in net new yuan loans in August, more than double the previous month's tally, as the central bank keeps policy accommodative to underpin growth.
Mr Dan Smith, Oxford Economics analyst, said that "The demand picture is relatively good for copper in terms o f China and I think we've worked through a lot of those excess inventories. Given we're at $4,700, that seems a relatively cheap price compared to where we're likely to be next year."
London Metal Exchange copper futures traded up 1.4percent to $4,713 a tonne in official midday rings, having earlier hit their highest since Aug. 23 at $4,726.
LME copper stocks , which have more than doubled since the start of June, fell 1,875 tonnes on Tuesday to351,500, their third consecutive day of declines.
Shanghai Futures Exchange data showed a weekly drop in copper inventories of 5.1 percent, bringing stocks to their lowest since September last year.
Mr William Adams, head of research at Fastmarkets, said that "With better than expected Chinese data appearing, we would expect dips to be well supported and to be followed by further strength."
Zinc hit a month low of $1,883.50 a tonne, and was last bid up 0.3 percent in rings at $2,240.
Zinc has been the best performing LME metal this year as the closure of major mines tightened the concentrates market, though the extent to which this tightness has been priced in is up for debate.
LME data shows zinc stocks , currently at446,675 tonnes, have risen some 18 percent since June.
Industry data showed, nickel was last bid down 1.1 percent in rings at$9,750, its lowest since late August as traders largely discounted a bigger impact from a crackdown on Philippine mine supply. The global market deficit in nickel narrowed to 5,200 tonnes in July from a revised deficit of 12,100 tonnes the month before, taking the shortfall so far this year to 42,500 tonnes. Aluminium traded unchanged in rings at $1,565 a tonne but was not far off a three-month low hit on Tuesday.
A Chinese industry group has denied that the country's aluminium producers could be involved in exporting extrusion products via Mexico to circumvent U.S. duties. Lead was last bid up 1 percent in rings at $1,911.50a tonne while tin was last bid up 0.8 percent at$19,200.
Source : Reuters