London copper fell on Monday after Chinese steps to strengthen its economic rebound raised doubts about the recovery in the world’s top metals consumer and second biggest economy.
China will cut the amount of cash that banks must hold as reserves, releasing around 1 trillion yuan in long-term liquidity to underpin its post-COVID economic recovery as it starts to lose momentum.
The news boosted industrial metals prices on Friday, but the rally faded on Monday in London.
“Many have put faith in a V-shaped recovery by the Chinese economy and this news rather dents that optimism. In some ways this is not actually bullish news as it seems to have been viewed by many,” said Malcolm Freeman, a director at UK brokerage Kingdom Futures.
Three-month copper on the London Metal Exchange fell 0.8% to $9,441 a tonne by 0649 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange advanced 0.6% to 69,010 yuan a tonne.
* Chinese battery maker EVE Energy said on Friday it would take a stake in a small lithium producer and establish a joint venture to build a lithium chemicals project costing up to 1.8 billion yuan.
* The GFG Alliance owned by tycoon Sanjeev Gupta said it had agreed a deal with commodities group Glencore to refinance the debt on its aluminum unit after GFG’s main lender collapsed in March.
* LME zinc fell 1% to $2,946 a tonne and nickel declined 0.9% to $18,585 a tonne.
* ShFE aluminum advanced 1.4% to 19,055 yuan a tonne, nickel increased 0.7% to 139,010 yuan a tonne and lead rose 0.9% to 15,880 yuan a tonne.
* The discount of LME cash copper over the three-month contract
* For the top stories in metals and other news, click or (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu and Barbara Lewis)