BLBG:Copper Rises As Chinese Premier Sees Room For Easing
Copper gained after Chinese Premier Wen Jiabao said easing inflation provides room to adjust monetary policy, boosting optimism that the government will take more steps to stimulate the world’s second-largest economy.
Copper for delivery in three months rose as much as 0.8 percent to $7,443.75 a metric ton on the London Metal Exchange, before trading at $7,398 at 2:16 p.m. Shanghai time. December- delivery copper was little changed at $3.364 per pound on the Comex in New York.
“Wen’s comments have boosted morale,” said Cheng Xiaoyong, an analyst at Baocheng Futures Co. “On the other hand, lack of growth in real demand will continue to cap the upside.”
There’s “growing room for monetary policy operation,” Wen said during a two-day inspection tour to the eastern province of Zhejiang, China’s state television reported yesterday. He said downward pressure on the economy remained “relatively large,” according to state radio.
The comments may bolster speculation China will cut banks’ reserve requirements or benchmark interest rates again after inflation slowed to a 30-month low in July, export growth collapsed and new yuan loans trailed estimates. The country has cut the reserve-requirement ratio for banks three times starting in November and lowered interest rates in June and July while accelerating approvals of investment projects.
Copper for December delivery on the Shanghai Futures Exchange fell 0.4 percent to 54,250 yuan ($8,519) a ton. On the LME, aluminum, lead, nickel and tin climbed, while zinc fell.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
