LONDON: London copper prices rose to a three-week high on Wednesday on reinforced hopes of more stimulus measures from top metals consumer China after it cut the amount of cash that banks must hold as reserves.
Three-month copper on the London Metal Exchange (LME) was up 1.7% at $8,551 per metric ton in official open-outcry trading after hitting its highest since Jan. 2, breaking above the 21-day moving average’s resistance level of $8,443.
“Industrial metals extended gains as China unveiled a plan to cut reserve requirement ratio for banks. Hopes for more stimulus from Beijing are also supporting,” said Ewa Manthey at ING.
The US dollar weakened, making greenback-priced commodities more attractive for buyers using other currencies, while daily LME data showed a decline in copper stocks, providing additional support. Benchmark LME aluminium was up 0.7% at $2,243 in official activity after touching its Jan. 8 high of $2,268, as traders continued to gauge risks of potential European Union import sanctions on major producer Russia.
Poland and the Baltic states called for the EU to ban Russian aluminium and liquefied natural gas imports over Moscow’s invasion of Ukraine, a Polish official told Reuters on Tuesday.
“This could potentially lead the LME to reopen the debate over whether it should ban deliveries of Russian metal (to the LME-registered warehouses),” Manthey said.
The share of available aluminium stocks of Russian origin in LME-registered warehouses was at 90.4% in December. LME zinc climbed 2.1% to $2,572 a ton, lead was steady at $2,167.5, tin added 0.9% to $26,470 and nickel rose 0.7% to $16,425.
The near-term supply of LME lead is getting tighter, as implied by the discount of cash contract to the three-month contract shrinking to $0.9 a ton as of Tuesday’s market close from $33.5 a week ago.
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