China data boost demand outlook for base metals

BEIJING — Shanghai base metals rose on Monday, buoyed by optimism over the demand outlook, after Chinese lending increased and Sino-US trade talks continued.

“Sentiment in the metals markets was… boosted by data showing China’s credit growth exceeded expectations in January,” ANZ wrote in a note.

Chinese banks extended a record 3.23 trillion yuan ($478.07 billion) in net new yuan loans last month as policy makers try to prevent a sharper economic slowdown in the world’s top metals consumer.

Copper hit a near two-month high in Shanghai despite a big boost in Chinese inventories of the metal over the past two weeks, while London copper was higher for a fourth straight day.

“Progression in US-China trade talks should provide support to commodity prices this week,” ANZ added.

CAUTIOUS OPTIMISM

The most-traded April copper contract on the Shanghai Futures Exchange (ShFE) was up by one percent at 48,850 yuan a ton by the end of the morning session, having earlier touched its highest since Dec. 19 at 48,900 yuan.

Three-month copper on the London Metal Exchange (LME) edged up 0.5% to $6,219 a ton.

PT Freeport Indonesia’s copper concentrate export permit expired on Feb. 15, and the company has not received export recommendations from the mining ministry that will help it to obtain a new permit, a company spokesman said on Monday.

Chinese state media expressed cautious optimism over trade talks between the United States and China.

The premium for cash copper over the three-month LME price was at $5 a ton on Friday, versus a discount of $19.25 a week earlier, indicating tighter immediate supply.

In China, which in January imported the most unwrought copper in September, import premiums for physical copper stood at $64 a ton, down from $68 a ton a week ago.

Copper inventories in warehouses monitored by the ShFE rose by 45.1%, or 64,491 tons, from two weeks earlier to 207,118 tons on Feb. 15.

Zinc stocks were up 84.2% at 86,447 tons.

Zinc, used to galvanize steel, was the biggest gainer from the Chinese loans data, rising as much as 2.3% in Shanghai to 21,830 yuan a ton before paring gains to 1.3%.

London zinc shrugged off early losses to nudge up 0.2%. —