Copper ticks higher on China optimism, consumer buying

LONDON: Copper gained on Wednesday amid hopes that stimulus measures would help revive the economy of top metals consumer China while some industrial buyers took advantage of lower prices.

China unveiled measures on Tuesday to help boost consumption, including the possible removal of restrictions on auto purchases.

"Maybe the expectation by market players is that this could spill over to the general economy. This could be a factor behind the price rises today," said analyst Daniel Briesemann at Commerzbank in Frankfurt.

"I think most of the bearish news should be priced in now for most of the metals, so we could see a price correction higher until the end of the year."

There has also been evidence of consumer buying over the past few sessions, broker Marex Spectron said in a note.

Benchmark copper on the London Metal Exchange was up 0.2% to $5,693.50 a tonne by 1030 GMT, while the most-traded copper contract on the Shanghai Futures Exchange advanced 0.5% to 46,560 yuan ($6,564.40) a tonne.

Copper has shed 14% after touching a peak around $6,600 in April, hit by worries about trade tensions and faltering global economic growth, while Commerzbank sees copper recovering to an average of $6,000 a tonne in the fourth quarter.

* CHINA RATES: Deteriorating Sino-US trade ties and interest rate reforms are fuelling speculation China will start cutting key rates from next month, but bankers expect borrowing costs to come down only gradually.

* CHALCO: Chinese aluminium giant Chalco's, production of the metal fell more than 8% in first-half 2019 from the same period a year earlier, data showed on Wednesday, highlighting the impact of low prices on Chinese smelters.

* NICKEL WASTE: Waste from a nickel plant in Papua New Guinea owned by Metallurgical Corporation of China spilled into the adjacent Basamuk Bay over the weekend, three sources told Reuters on Wednesday.

* NICKEL TIME SPREAD: The premium of cash LME nickel over the three month contract <CMNI0-3> jumped to $79 a tonne by Tuesday's close, the highest in a decade, indicating tight near-term supply of metal in LME warehouses. One party holds 50%-80% of available LME inventories, data showed.

Nickel was the strongest performer on the LME, advancing 1.4% to $15,925 a tonne.

PRICES: Aluminium dipped 0.1% to $1,759 a tonne, zinc lost 0.1% to $2,272, lead fell 0.4% to $2,092.50, while tin gained 1% to $15,890.