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METALS-Copper gains as China cenbank support spurs growth hopes
May 12, 2017 / 10:32 AM / 7 months ago

METALS-Copper gains as China cenbank support spurs growth hopes

* LME/ShFE arb:

* China shuffles market funding, injects medium term cash

* China April new yuan loans 1.1 trln yuan, more than expected (Adds closing prices, details)

By Maytaal Angel

LONDON, May 12 (Reuters) - Copper rose on Friday after hitting a one-week high in the previous session with investors tempted by falling stockpiles and as Chinese authorities’ move to ease monetary policy spurred growth hopes.

China’s central bank injected fresh funds through a medium-term lending facility on Friday while keeping a tight rein on short-term funding in an effort to dampen speculative investment.

Chinese banks extended 1.1 trillion yuan ($159 billion) in net new yuan loans in April, above analysts’ expectations.

“While people were fearing tightening monetary policy in China would reduce growth, it’s unlikely the Chinese will really push a hard tightening. They want to keep the economy on a very even keel in the run up to politburo change in the autumn,” Nitesh Shah, commodity strategist at ETF Securities, said.

Reining in excessive local government debt and the shadow banking sector in China has been high on the central government’s agenda in recent weeks, leading to concerns growth will stall.

* COPPER PRICES: Three-month copper on the London Metal Exchange ended up 0.3 percent at $5,559 a tonne, after settling 0.8 percent up overnight.

* COPPER STOCKS: LME data showed copper stocks fell 7,350 tonnes to 329,375, their lowest since March 3. Copper stocks in Shanghai Futures Exchange warehouses fell to 194,993 tonnes, their lowest since Jan. 20. MCU-STOCKS

* COPPER TECHNICALS: LME copper may test a support at $5,472 per tonne, a break below which could cause a further loss into the range of $5,365-$5,427.

* DOLLAR: The dollar fell after weaker-than-expected U.S. economic data raised doubts about whether the Federal Reserve will assume a hawkish bent through the year end. A weaker dollar makes dollar-priced metals cheaper for non-U.S. investors.

* CHINA PRODUCTION: China’s industrial output is expected to have risen by 7.1 percent in April, slowing from a 7.6 percent rise in March, while fixed asset investment probably stayed relatively stable at 9.1 percent in April.

* ALUMINIUM: Russian aluminium giant Rusal posted higher first-quarter recurring net profit on Friday amid stronger aluminium prices and said it was preparing to resume construction of its aluminium smelter in Siberia.

* OTHER METALS: Aluminium ended up 0.9 percent at $1,891 a tonne, nickel ended up 0.1 percent at $9,320, zinc closed down 1.4 percent at $2,554, lead closed down 2.3 percent at $2,126, having earlier touched its lowest since April 21 at $2,116, while tin ended down 0.1 percent at $19,825.

($1 = 6.9029 Chinese yuan renminbi)

Additional reporting by James Regan; Editing by Susan Thomas and Elaine Hardcastle

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