The Copper prices yesterday went up backed by better-than-expected Chinese growth and hopes of further monetary policy easing by the American Federal Reserve.
According to Reuters, the positive factors outweighed fears of spreading debt contagion across Europe and the possibility of more tightening measures by Beijing for now.
The prices for the three-month copper on the London Metal Exchange (LME) rose 0.7 per cent to US$9,720 a tonne while the most-active September copper contract on the Shanghai Futures Exchange jumped nearly 1.9 per cent to 72,460 Yuan per tonne.
China’s economy grew by 9.5 per cent in the second quarter from a year ago, not far from the 9.7 per cent expansion in the first three months of the year.
The data lifted Asian equities and other risk assets, despite nagging worries of a global slowdown at a time euro zone debt worries are also deterring investors.
Equally supportive of the base metals, was the belief by some Federal Reserve officials that further monetary policy easing could be needed if the recovery remains too sluggish to cut the stubbornly high America’s
jobless rate.
This raised hopes of a continued loose monetary policy that is supportive of commodities and pared the dollar’s strength from a four-month high reached in the previous session.
China’s June refined copper and copper concentrate outputs rose to 8.7 per cent and 12.7 per cent from May, respectively.
Coupled with a rebound in June copper imports and reported declines in Chinese bonded and ShFE warehouses data pointed to a steady demand for
the metal, traders said.
On a more pessimistic note, Moody’s cut Ireland’s credit rating to junk, warning that the debt-laden country was likely to need a second bailout, heightening fears of debt contagion in Europe.
[Times of Zambia]
