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METALS-Most base metals climb on hopes of slower U.S. rate hikes, China stimulus

METALS-Most base metals climb on hopes of slower U.S. rate hikes, China stimulus

Reuters · 07/28/2022 01:05
METALS-Most base metals climb on hopes of slower U.S. rate hikes, China stimulus

Adds comments, details and updates prices

- Prices of most base metals rose on Thursday, as a softer dollar and the prospects of slower pace of U.S. rate hikes and further China stimulus measures lifted sentiment.

Three-month copper on the London Metal Exchange CMCU3 was up 1.4% at $7,745 a tonne, as of 0448 GMT, speeding up a rally seen since last Thursday.

The U.S. Federal Reserve raised rates by 75 basis point for the second consecutive meeting to rein in inflation, as widely expected by the market.

Comments from Fed Chair Jerome Powell after the policy statement were seen as less hawkish, therefore, sparking hopes of a slower interest rate hike for the remaining time this year.

"The hint of likely slower pace of rate hikes eased some worries over a continually aggressive Fed, but we are cautiously optimistic given metals demand outlook still depends on global economic performance," a trader said.

Copper, with its wide application in different industries from power generation to transportation, is often used as an economic parameter.

Price of the metal recorded a sharp decline after hitting a record high in March amid economic slowdown.

A soft dollar also eased some pressure on metals, making it cheaper for holders of other currencies. L1N2Z82TZ

In other metals, LME aluminium CMAL3 gained 1% to $2,446 a tonne, zinc CMZN3 climbed 1% to $3,086.50, lead CMPB3 was up 0.6% at $2,024, while tin CMPB3 dipped 0.2% to $24,305.

The market also hopes to see more stimulus on infrastructure projects that could strengthen metals demand after China's Politburo meeting at the end of this month, where the country's top decision-making body gathers to discuss economic policies for the rest of the year.

"More stimulus will help bolster market confidence in the short term," said He Tainyu, a copper demand analyst at CRU Group. "But pressure is here to stay if China's exports and property markets remain weak in a longer run."

The most-traded September copper contract on the Shanghai Futures Exchange SCFcv1 rose 2.4% at 59,640 yuan ($8,839.48) a tonne.

ShFE lead SPBcv1 climbed 0.4% to 15,250 yuan a tonne, tin SSNcv1 advanced 1% to 194,640 yuan a tonne, while SNIcv1 lost 0.2% to 167,660 yuan a tonne.

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($1 = 6.7470 Chinese yuan)


(Reporting by Siyi Liu and Emily Chow; Editing by Sherry Jacob-Phillips)

((Siyi.Liu@thomsonreuters.com;))

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