LONDON: Copper prices shot up by nearly 4pc on Wednesday on relief that China's debt-burdened Evergrande would pay interest on a domestic bond, easing fears the property giant's troubles might hit the global economy.
Three-month copper on the London Metal Exchange had climbed 3.9pc to $9,322 a tonne by 1600 GMT, reversing losses from the previous session when the contract went as low as $8,810 a tonne, its weakest since Aug. 19.
Evergrande agreed to settle interest payments on a domestic bond on Wednesday, while the Chinese central bank injected cash into the banking system.
"That heartened markets for the time being and we're running into some dip buying. Consumers are probably running short of inventory, so these prices may prompt restocking," said independent consultant Robin Bhar.
"I think the consensus is that this is not China's Lehman moment. When it comes to China, everyone owns part of the problem and at the end of the day; it's all part of China PLC. They're not going to let it disrupt the economy."
Copper hits one-month low on renewed Evergrande fears
Lead was the only LME metal in negative territory, down 0.5pc to $2,124 a tonne after touching $2,108.50, the weakest since April. Inventories in Shanghai have more than tripled over the past six months to 205,898 tonnes.
The speculative net long position on the LME has slid to 2pc of open interest from 12.6pc on Sept. 10, broker Marex said in a note.
LME aluminium climbed 3.1pc to $2,935 a tonne, nickel rose 2pc to $19,205, zinc advanced 2.1pc to $3,041 and tin jumped 4.2pc to $35,270.
A Chilean court handed a reprieve to BHP's Cerro Colorado copper mine, agreeing to suspend a ban on it pumping water from an aquifer for 90 days.
Peru wants to revise the framework for the country's mining industry, redrafting the umbrella law that regulates the sector, as well as the legislation that sets royalty payments.
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