London copper edges up in holiday-thinned trade

LONDON copper futures ticked higher in slow trading on Monday, with market participants in top metals consumer China away this week for the National Day break.

Underpinning investor sentiment was data showing China’s manufacturing sector expanded at the fastest clip in more than five years, as well as Beijing’s move to slash bank reserve requirements to boost lending.

Three- month copper on the London Metal Exchange (LME) was up 0.40% at $ 6,509 a ton by 0631 GMT. The metal ended July- September with a 9.20% gain, marking its fifth quarterly increase.

“So far, it has felt more like a scramble to cover shorts (short positions) established Friday than people getting long as we await the European open for a proper gauge of where these markets are at,” Matt France, head of institutional sales at Marex Spectron, said in a note.

China’s manufacturing activity grew at the fastest pace since 2012 in September as factories cranked up output to take advantage of strong demand and high prices, easing worries of a slowdown before a key political meeting next month, data released on Saturday showed.

China’s central bank trimmed the amount of cash that some banks must hold as reserves for the first time since February 2016 in a bid to encourage more lending to struggling smaller firms and energize its lackluster private sector.

An official gauge of China’s steel industry declined in September but stayed in solid expansion territory, as the industry faces upcoming production restrictions aimed at reducing choking air pollution over the winter.

The US dollar was firmer, underpinned by higher US yields, while the euro came under pressure as investors monitored the aftermath of an independence vote in Spain’s Catalonia.

Catalonia’s regional leader opened the door to a unilateral declaration of independence from Spain on Sunday after voters defied a violent police crackdown and, according to regional officials, voted 90% in favor of breaking away.

The Indonesian unit of US miner Freeport McMoRan, Inc. can continue to export copper concentrate even if negotiations over the company’s permit to operate the giant Grasberg mine are not resolved this month.

Among other industrial metals, LME aluminum slipped 0.50% to $2,092 a ton, zinc eased 0.30% to $ 3,154 and lead rose 0.30% to $2,492.50. —