Hong Kong - Copper was poised for a second monthly gain as investors weigh the possibility of further stimulus by China’s policy makers against signs of slowing industrial activity in the world’s biggest consumer.
The metal climbed as much as 0.6 percent and has advanced 3.1 percent this month. The nation’s growth rate has fallen “a bit” too much and the government has room to respond, Zhou Xiaochuan, governor of the People’s Bank of China said on Sunday. The official manufacturing Purchasing Managers’ Index for March may be 49.7, according to a Bloomberg survey before data due on Wednesday. That would mark a third month of contraction. A reading below 50 signals reduction.
“Bad Chinese data will stir up the chorus to stimulate,” David Lennox, a resource analyst at Fat Prophets in Sydney, said in an e-mail. “China does have the settings to be able to stimulate with high cash rates, bank lending ratio settings and a massive reserve.”
Copper for delivery in three months on the London Metal Exchange rose 0.4 percent to $6,079.50 a metric ton ($2.76 a pound) by 10:23 a.m. in Hong Kong from $6,055, the lowest close since March 20 on Friday. In New York, May futures climbed 0.1 percent to $2.7705 a pound, while in Shanghai the metal for June lost 0.2 percent to 43,690 yuan ($7,033) a ton.
A preliminary reading for China’s manufacturing fell to an 11-month low in March, according to HSBC Holdings and Markit Economics data last week, while industrial profits fell 4.2 percent in January and February, government data showed on Friday.
Also on the LME, aluminium, lead and zinc rose, while nickel fell and tin was unchanged.
Bloomberg