Copper steady on Chinese data; aluminum slips

LONDON — Copper prices held steady on Wednesday as better than forecast Chinese lending data signaling solid economic growth in the world’s biggest metals consumer was offset by signs that a supply squeeze in China was receding.

Aluminum, meanwhile, fell after a second day of large inflows of metal into London Metal Exchange (LME) warehouses.

“For copper, on the macro side, the (Chinese) data was slightly better than expected, so that’s a positive,” said Deutsche Bank analyst Nick Snowdon.

“But on the physical side (there are) slightly softer signals in terms of Chinese import demand in the near term,” he said.

Benchmark copper on the LME closed down 0.1% at $6,219 a ton.

Copper has been locked between around $6,100 and $6,350 since late September. Fears that a US-China trade dispute would weaken demand helped push prices to a 14-month low of $5,773 in August.

Cash copper on the LME, which earlier this month was trading at the largest premium over the three-month contract since June 2016, is now trading at a discount of $3, signaling a slackening of demand for nearby metal. Analysts said that reflected a lessening of need for metal in China after a recent shortage.

Yangshan copper import premiums have also dipped from 3-year highs. China’s copper imports surged in September, which may have satisfied immediate demand, Deutsche’s Mr. Snowdon said.

LME aluminum ended down 0.6% at $2,022 a ton after headline stocks in LME-registered warehouses surged from 926,100 tons to 1,082,600 tons in two days.

The inflows did not reflect a change in supply-demand fundamentals, said a person at a metals trading bank in London. “This is a shuffle between onand off-warrant stocks,” he said.

Aluminum prices barely moved after Alcoa said on Wednesday it would close two aluminum plants in Spain with combined annual production of 180,000 tons.

Chinese banks extended 1.38 trillion yuan ($199.25 billion) in net new yuan loans in September, more than analysts had expected and up from the previous month.

China has stepped up economic stimulus in recent months to counter any negative effect from a trade dispute with the US.

LME zinc finished up 2.3% at $2,665 a ton; nickel closed down 1.8% at $12,375; lead slid 0.9% to $2,047; and tin ended down 0.7% at $19,075. —