Copper gains for second day on positive outlook, tight supply
Copper gained for the second day on Wednesday in Asia as markets optimism on vaccination to contain the spread the Omicron variant and persistent tight supply.
Copper, the indicator of the health of the economy, on the London Metal Exchange (LME) rose by 0.01% to $9,535.25 per tonne. The metal surged 1.20% to $9,559.5/tonne on Tuesday.
“The market was optimistic that vaccines can help curb the spread of the COVID-19 variant Omicron,” Shanghai Metal Market (SMM) said in its market commentary on Wednesday.
Signs that US President Joe Biden may revive his $2trn bill to boost infrastructure and rebuild the economy boosted the market confidence, SMM added.
Tight market, demand outlook
LME’s aluminium was up 0.49% to $2,767.5/tonne after it led gains in base metals across the board on Tuesday. The metal surged 3.53% on Tuesday to $2,754/tonne.
Nickel rose 0.36% to $19,685/tonne on Wednesday after closing up 1.42% to $19,615 on Tuesday.
Market tightness and demand outlook also supported the base metals market, said Sucden Financial in its report on Wednesday. China cut borrowing costs as means of supporting the economy.
The People’s Bank of China cut its one-year loan prime rate to 3.8%, down from 3.85%.
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China output curb
“Additionally, continued production curbs from China and surrounding economic views about the Chinese economic outlook should continue to drive the market performance in the near term,” Sucden Financial said.
China has been curbing production of energy-incentive base metals, including nickel and aluminium due to power shortage and to meet its emission target ahead of the Winter Olympics.
Tin and zinc fell on Wednesday. Tin dropped 0.19% to $38,610/tonne and zinc fell 0.24% to $3,419.25/tonne. Lead was steady at $2,293.75/tonne.