Copper traded near a one-week high in London after a report that China’s central bank intensified stimulus measures to support growth, boosting the demand outlook in the biggest metals user. Other metals fell.
The People’s Bank of China is injecting 500 billion yuan ($81 billion) into the nation’s five biggest banks, according to a government official familiar with the matter. The Federal Reserve will release a policy statement and new economic projections today as a meeting of officials ends.
“First impressions are that it is very significant,” Joseph Murphy, an analyst at Hermes Fund Managers Ltd., said by e-mail today, referring to the PBOC. “Firstly because of its size, and also the signal it sends to the market. Up to now, any easing has been very focused. This is much more economy-wide.”
Copper for delivery in three months climbed 0.3 percent to $6,920 a metric ton by 12:46 p.m. on the London Metal Exchange after touching $6,992 yesterday, the highest since Sept. 9. The contract for December delivery fell 0.7 percent to $3.1435 a pound on the Comex in New York. An index of the six main metals traded on the LME rose the most in almost four weeks yesterday.
Economists in a Bloomberg News survey yesterday were almost evenly divided on whether the Fed will retain a reference to interest rates staying low for a “considerable time.”
“It may not be until tomorrow that we get a better feel for how the market has interpreted the combination of the Chinese stimulus and the Fed guidance,” William Adams, an analyst at Fastmarkets.com in London, said in a note.
Comex copper jumped as much as 4.1 percent yesterday, the largest intraday increase since May 2013. That triggered a “stop spike event,” halting trading for 10 seconds with all transactions remaining valid, according to CME Group Inc., which owns the exchange.
Copper stockpiles monitored by the LME fell 0.6 percent to 155,400 tons, data showed today. Orders to take the metal from warehouses slid 2.4 percent to 39,025 tons. Zinc removal orders jumped 14 percent to 72,500 tons on bookings in Detroit and New Orleans, extending this week’s increase to 39 percent.