LONDON: Copper prices steadied on Friday after a week of heavy losses as investors got a glimmer of hope that top metals consumer China was bolstering its economy with financing measures. Zinc and lead, however, touched fresh lows as gains in inventories highlighted weak demand and oversupply.
Data on Friday showed that new bank loans in China jumped by more than expected to an all-time high in January, reinforcing expectations for more stimulus in the coming months.
Three-month copper on the London Metal Exchange was up 0.2% to $8,206 per metric ton at 1130 GMT after it slumped to its lowest in nearly three months on Thursday.
The contract has lost 3.2% so far in the week, set for its biggest weekly loss since last August.
“The financial data is clearly a positive surprise, but this is only one nice print, people are still worried about China,” said Nitesh Shah, commodity strategist, WisdomTree.
“Instead of these micro interventions, the market is looking for much bolder steps, and we may only get that after the (Chinese) new year.”
The Shanghai Futures Exchange (SHFE) is closed on Friday and next week for the Lunar New Year holiday.
The prolonged property sector crisis in China has weighed on sentiment given that construction is a major consumer of base metals.
LME lead shed 1.1% to $2,033 a ton, the weakest since Dec. 13.
LME inventories on Friday rose to 150,675 tons, the highest in over six years, having surged by 39% in slightly over two weeks.
“The stocks data doesn’t paint an encouraging sign. The global manufacturing environment is quite weak so that’s probably why these stocks are continuing to build up,” Shah said.
Copper retreats on Chinese demand uncertainty