Shanghai - Copper and aluminium rose for a third day after China cut benchmark interest rates for the second time in three months to spur economic growth, boosting demand prospects in the world’s biggest metals consumer.
Copper climbed as much as 0.8 percent and aluminum increased as much as 1 percent. The People’s Bank of China announced a benchmark lending and deposit rate cut of a quarter percentage point on Saturday. A private gauge of factory output released on Monday from HSBC Holdings PLC and Markit Economics was 50.7 in February, compared with 49.7 in January.
“Metals advanced on China’s interest rate cut,” said Lian Zheng, Shanghai-based analyst at Xinhu Futures. “The rate cut as well as the official PMI data announced yesterday also showed slowing economic growth in China. Weak physical demand is the reality right now and could not be ignored.”
The Chinese government’s manufacturing Purchasing Managers’ Index came in at 49.9 in February, official data showed on Sunday, indicating the sector contracted for a second month.
Copper for delivery in three months on the London Metal Exchange climbed 0.4 percent to $5,919.50 a ton ($2.69 a pound) at 11.57am in Shanghai. The metal gained 7.3 percent in February, the biggest monthly advance since September 2012.
In New York, copper for May delivery gained 0.2 percent to $2.6975 a pound, while the metal for May in Shanghai was also up 0.3 percent to 42,870 yuan ($6,831) a ton.
On the LME, aluminium gained 0.8 percent to $1,830 a ton, heading for the highest close since February 13. Zinc, lead and nickel rose while tin was unchanged.
Bloomberg