METALS-Copper rises as China pledges economic support

Updates throughout, changes dateline from BEIJING

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LONDON, Dec 19 (Reuters)Copper prices rose on Monday, supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government.

The Chinese government said it would step up measures to stabilise its economy and the central bank is expected to ease monetary policy before long.

But for now, demand remains weak and the country is gripped by a rise in COVID-19 infections that some fear could kill more than 1.5 million in coming months.

“The market is trying to gauge how to assess China, whether to focus on the recovery or on short-term troubles,” said Saxo Bank analyst Ole Hansen.

“It seems the market is buying into the long-term story. Selling appetite is limited.”

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 1.1% at $8,359.50 a tonne by 1100 GMT while global equities edged higher and the dollar eased, making dollar-priced metals cheaper for buyers with other currencies. MKTS/GLOBUSD=

Copper fell as low as $6,955 in July as the global economy weakened and China’s zero-COVID policy shuttered factories. Hopes for looser Chinese restrictions and broader economic recovery next year have lifted prices since November.

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But industrial activity is contracting in developed markets and China, said analysts at ANZ bank.

A World Economics survey showed China’s business confidence had fallen to its lowest since January 2013.

Yangshan copper import premiums SMM-CUYP-CN fell to $52.50 a tonne from about $145 in early November, indicating lower demand for overseas metal.

Metals prices derived some support from fears of low inventories and supply after Panama on Friday ordered operations to halt at a copper mine owned by Canada-based First Quantum Minerals FM.TO.

In other metals, LME aluminium CMAL3 was down 0.2% at $2,371 a tonne, zinc CMZN3 was up 0.2% at $3,023.50, nickel CMNI3 fell 0.7% to $28,080, lead CMPB3 rose 0.4% to $2,159 and tin CMSN3 slipped 0.5% to $23,425.

(Reporting by Peter Hobson Additional reporting by Siyi Liu and Dominique Patton Editing by David Goodman)

((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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