METALS-Rising Chinese imports push copper higher
LONDON, Feb 26 (Reuters) - The price of copper rose on Monday as higher imports to China and strong economic data cemented expectations of solid demand from the world’s biggest metals consumer.
Rising global stock markets also fuelled appetite for riskier assets including metals, said Societe Generale analyst Robin Bhar.
“Both macro and micro factors are good,” he said.
COPPER: Benchmark three-month copper on the London Metal Exchange closed 0.2 percent up at $7,110 a tonne, not farom a four-year high of $7,312.50 touched in January.
CHINA IMPORTS: Copper imports to China rose 13 percent from December to 314,525 tonnes in January, while refined nickel imports doubled to 26,691 tonnes and refined zinc imports surged by 287 percent to 67,111 tonnes.
ZINC/NICKEL: Prices of nickel and zinc, used in the steel industry, also rose on the strong import data and a surge in Chinese steel futures after reports that China’s top steelmaking city will extend production curbs.
Nickel finished 1.2 percent up at $13,925 a tonne, close to three-year highs, and zinc ended near its highest since 2007 after gaining 0.8 percent to $3,531.50.
CHINA SCRAP: Chinese imports of scrap metal, meanwhile, fell to the lowest level in nearly two years in January after restrictions were introduced. Scrap copper imports were down 28 percent year on year.
The price of copper, used in power and construction, surged last year on expectations that lower scrap imports to China would increase demand for refined metal.
CHINA ECONOMY: Robust economic data reinforced expectations of strong demand for metals. Prices for new homes rose in January and a poll showed that China’s manufacturing sector is expected to register another month of relatively solid growth in February.
POSITIONING: Bets on higher copper prices increased on the COMEX exchange, with funds’ net long position rising for the first time this year in the week to Feb. 20.
ALUMINIUM: LME aluminium finished down 0.1 percent at $2,138 a tonne but still within sight of a six-year high of $2,290.50 touched in January.
OUTLOOK: “With no apparent shortage of supply, we expect prices to ease back in 2018,” Capital Economics analyst Simona Gambarini said in a note.
SUPPLY: Global primary production rose in January, according to the International Aluminium Institute. There was also an increase in exports of semi-processed aluminium products from China, the world’s largest producer. And in the United States a smelter was poised to restart idled production if Washington curbs imports.
OTHER METALS: LME lead closed 1.9 percent up at $2,580 and tin finished down 0.1 percent at $21,625.