Most base metals set for weekly gains on China demand hopes

FE Team | Published: January 26, 2024 23:24:44

Nonferrous metals traded largely mixed on Friday, but most were set for weekly gains on hopes of an improvement in demand from top consumer China following a raft of policy support, reports Reuters.
Three-month copper on the London Metal Exchange CMCU3 fell 0.6% to $8,521 per metric ton by 0736 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 closed flat at 68,870 yuan ($9,590.32) a ton.
For the week, London copper was up 2 per cent, on track for its biggest gain since December 2023, while SHFE copper was 2 per cent higher, the sharpest jump since last July.
China's central bank earlier this week announced a deep cut in the amount of cash banks hold as reserves and a Bloomberg report said Chinese authorities were considering mobilising about 2 trillion yuan to stabilise a slumping stock market.
"Base metal prices experienced modest gains over the past week, on the back of strengthened optimism for Mainland Chinese stimulus," BMI analysts said in a note.
However, uncertainty around China's economic recovery and a stronger U.S. dollar - which makes greenback-priced metals more expensive to holders of other currencies - put a cap on metals prices, they said.
"2024 will be a close tug-of-war between fundamentals and sentiment driven by macro factors," they added.
LME nickel CMNI3 eased 0.1 per cent to $16,680 a ton on Friday, lead CMPB3 declined 0.8 per cent to $2,134, while aluminium CMAL3 eased 0.1 per cent to $2,235.50, zinc CMZN3 dipped 0.1% to $2,578 and tin CMSN3 edged up 0.2 per cent at $26,700.
SHFE aluminium SAFcv1 rose 0.7 per cent to 19,055 yuan a ton, nickel SNIcv1 increased 0.4 per cent to 130,400 yuan, zinc SZNcv1 advanced 0.3 per cent to 21,410 yuan, tin SSNcv1 climbed 0.6 per cent to 221,700 yuan, while lead SPBcv1 fell 1.4 per cent to 16,225 yuan.
LME lead was on track for a fifth straight weekly gain. The premium of cash lead over the three-month contract CMPB0-3 was last at $8.84 a ton, compared to a discount of $44.75 last month, suggesting nearby supplies are tightening.