July 6, 2020 / 7:34 AM / a month ago

METALS-Copper rises on hopes of faster recovery in China, more stimulus

(Updates prices)

By Mai Nguyen

SINGAPORE, July 6 (Reuters) - Copper and most other base metals rose alongside equities markets on Monday, riding on hopes of a pickup in pace of China’s economic recovery and more stimulus steps to support the global economy.

Three-month copper on the London Metal Exchange rose 1.2% to $6,088 a tonne by 0724 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange closed down 0.2% at 49,040 yuan ($6,977.80) a tonne, having rebounded from sharper losses earlier in the session.

Asian shares hit four-month peaks and Chinese blue chips jumped to their five-year high, as investors counted on a revival in Chinese activity to sustain global economic growth, despite surging U.S. coronavirus cases.

Higher commodity prices could be linked to stronger Chinese stock indexes, a metals trader in China said.

Copper is often used as a gauge of global economic health.

Chile’s Codelco will temporarily halt construction to expand its El Teniente mine to combat the outbreak, while unions at its Chuquicamata mine voted for a seven-day on, seven-day off shift schedule to reduce worker exposure to the virus.

“Everything in the West is poor except for U.S. jobs. Metals rallied on fundamental demand in emerging markets and weaker U.S. dollar,” said a metals trader based in Singapore, adding that the market is expecting more stimulus in the United States.

FUNDAMENTALS

* SPREAD: LME cash copper flipped to a premium of $6.50 a tonne over the three-month contract CMCU0-3, after having stayed in discount since May 2019, indicating tight nearby supplies.

* OTHER PRICES: LME aluminium rose 0.4% to $1,620 a tonne and nickel jumped 1.9% to $13,245 a tonne, while ShFE nickel advanced 2.6% to 107,110 yuan a tonne and ShFE aluminium was up 0.9% to 14,125 yuan a tonne.

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$1 = 7.0280 yuan Reporting by Mai Nguyen; Editing by Subhranshu Sahu and Uttaresh.V

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