Copper rebounded from the lowest price in more than five years after a surge in credit growth eased concern that demand will slow in China, the world’s top user.
The faster-than-estimated estimated gains for financing spurred a rally for Chinese equities amid speculation that authorities are taking steps to support economic expansion. Copper slumped in the previous six sessions on concern that slowing growth would crimp metals consumption in the Asian country.
While shadow lending rose to the highest in monthly records that began in 2012, new yuan loans missed economists’ forecasts. China accounts for 45 percent of global copper demand, compared with 8 percent for the U.S., Morgan Stanley estimates.
“The stock market bounce in China had something to do with the gains in copper,” Edward Meir, an analyst at INTL FCStone in New York, said in a telephone interview. The weaker data for new loans “is leading to talk that the government must come out with more aggressive economic stimulus than the piecemeal program it’s been rolling out.”
Copper for delivery in three months rose 1.5 percent to $5,630 a metric ton ($2.56 a pound) at 5:10 p.m. on the London Metal Exchange. The metal fell as much as 8.6 percent yesterday to $5,353.25, the lowest since July 2009.
via Bloomberg
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