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Updates throughout, moves dateline from BEIJING
LONDON, Nov 11 (Reuters) – Industrial metals prices rose sharply on Friday after China eased some coronavirus rules, fuelling expectations that it will abandon a zero-COVID policy that has reduced economic activity and demand for metals.
Metals prices had already jumped on Thursday after softer than expected U.S. inflation data suggested the U.S. Federal Reserve could scale back interest rate rises.
The news gave hope that major restraints on economic growth could be less severe than feared in the coming months.
Global stock markets rallied and the dollar USD= weakened sharply, giving a boost to dollar-priced metals by making them cheaper for buyers with other currencies. MKTS/GLOB
Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 2.2% at $8,456.50 a tonne at 1154 GMT.
Prices of the metal used in power and construction have risen 13% this month on hopes of a revival in Chinese demand, but remain down more than 20% from a peak in March due to weaker economic activity.
“The situation has changed quite significantly … the outlook as improved,” said a commodities market analyst in Germany, adding that copper should reach $9,000 by year-end.
He said low inventories would also support prices and that speculative investors who have been neutral or bearish on copper could lift prices sharply if they turn bullish. MCUSTX-TOTAL, 3085692MNET
China’s easing included shortening quarantines by two days for close contacts of infected people and for inbound travellers but a full dismantling of COVID controls may be along way off.
The country is still struggling to control a wave of infections and recent economic data has been unexpectedly weak.
Economies are faltering elsewhere too, with the European Commission forecasting 0.3% euro zone growth next year and Moody’s cutting India’s growth projection to 4.8% in 2023.
In other metals, LME aluminium CMAL3 was up 4.1% at $2,423 a tonne, zinc CMZN3 rallied 5.4% to $3,039.50, nickel CMNI3 gained 3.1% to $26,750, lead CMPB3 rose 3.4% to $2,170 and tin CMSN3 was up 3.2% at $20,965.
(Reporting by Peter Hobson Additional reporting by Siyi Liu and Dominique Patton; editing by David Evans)
((Peter.hobson@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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