The most-traded November copper contract on the Shanghai Futures Exchange closed up 0.8 percent at 50,350 yuan ($8,200) a tonne on Monday helped by a softer dollar and a decision by top consumer China to remove controls on bank lending rates, which may help revive the slowing economy.
Some analysts say cheaper credit could help support the world's No 2 economy which has seen year-on-year growth fall in nine of the last 10 quarters, denting the outlook for demand for industrial metals. "That did a play a role in reassuring markets that the government is interested in reforming the banks and also raised some hopes that because of this new lending rate regulation, the banks would now have an incentive to lend more to the real economy or the small and medium-sized enterprises," said Sijin Cheng, commodities analyst at Barclays Capital. But Cheng said the actual impact of the new rule may be smaller than hoped for. Beijing scrapped the floor on lending rates although few loans are extended near that floor anyway.
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