Copper rises to two-month high as market expects more stimulus from China

SINGAPORE — London copper rose for a sixth consecutive session on Monday, with the market climbing to a two-month high on expectations that top consumer China will unleash more stimulus measures.

Nickel hit its highest since early November on worries about possible mine closures in the Philippines, while aluminum slid after a four-day rally.

Three- month copper on the London Metal Exchange (LME) gained 0.5% to 4,935.50 a ton by 0248 GMT after climbing earlier in the session to $4,960 a ton, highest since May 3.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) added 2.3% to 38,190 yuan a ton.

Growth in China’s manufacturing sector stalled in June, an official survey showed on Friday, adding to expectations that Beijing will have to roll out more stimulus soon to boost the sluggish economy.

“Base metals got a boost from a softer Chinese manufacturing PMI which raised expectations of further easing,” ANZ said in a research note.

There was broad support for industrial metals with uptick in stock markets. Asian shares shrugged off early losses and edged higher on Monday, while the Australian dollar was under pressure after no clear winner emerged from a weekend election.

Three month nickel rose to a high of $10,070 a ton, its strongest since November 4, adding to 5.6% rally on Friday. The new Philippine mining minister, a committed environmentalist, announced plans on Friday to review all mines operating in the country, the biggest supplier of nickel ore to China.

For aluminum, there was support as industrial firms in China increased their purchases of the metal in liquid form, creating a shortage of ingots, the form of the metal which drives prices. The shortage was highlighted on Friday when weekly data showed inventories on the Shanghai Futures Exchange slid 11.5% to 163,664 tons.

That means that ShFE inventories have tumbled by more than half from 341,615 tons in mid-March.

LME aluminum lost 0.3% to $ 1,659.5 a ton while prices in Shanghai rose 0.4% to 12,700 yuan a ton.