METALS-Copper Rises on China Factory Data, Stimulus Hope

SEATTLE (Scrap Monster): Copper prices in London advanced on Tuesday on hopes of stimulus in China, the world's biggest metals consumer, and some improvement in factory activities in the country.

Three-month copper on the London Metal Exchange (LME) CMCU3 rose 0.2% to $8,579.50 per metric ton by 0757 GMT, while the most-traded February copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1was flat at 68,960 yuan ($9,671.94) per metric ton.

 China's factory activity expanded at a quicker pace in December, a private-sector survey showed.

But a separate survey showed manufacturing activity shrank for a third straight month, raising the case for fresh stimulus measures.

The manufacturing industry is one of the major consuming sectors of industrial metals.

Copper prices were supported by low inventories in SHFE warehouses CU-STX-SGH, which were at 30,905 tons by the end of the year and more than half of the stock level at end-2022.

However, prices of metals were under slight pressure from a firm dollar index, making greenback-priced metals more expensive to holders of other currencies.

 LME aluminium CMAL3rose 0.3% to $2,390.50 a ton, nickel CMNI3climbed 0.5% to $16,680, zinc CMZN3 dropped 0.5% to $2,645.50, tin CMSN3advanced 0.2% to $25,465and lead CMPB3 was almost flat at $2,069.

SHFE aluminium SAFcv1increased 1.4% to 19,755 yuan a ton, nickel SNIcv1 dropped 0.5% to 127,510 yuan, zinc SZNcv1advanced 0.6% to 21,635 yuan, tin SSNcv1 declined 0.6% to 210,700 yuan, while lead SPBcv1 rose 0.6% to 15,955.

SHFE alumina February contract SAOG4 jumped 8% on continued worry about the supply of bauxite from major producer Guinea.

"Guinea blast has not had any impact on long-term contract supply; however, it caused tighter supply and higher prices in spot market, raising production costs on alumina producers," consultancy Mysteel wrote in a report.

"Some alumina producers in Shanxi and Henan provinces already under production control due to environmental protection might cut production further. Spot tightness of alumina could last till the Spring Festival in February," it added.

 Courtesy: www.reuters.com