Stimulus Check – METALS-Copper claws higher on softer dollar, hopes for China stimulus
(Adds analyst comment, updates prices, adds LONDON dateline)
LONDON, Aug 2 (Reuters) – Copper prices rebounded on Monday, lifted by a weaker dollar, hopes for more stimulus in China after weak factory data and prospects for a strike in top producer Chile.
Three-month copper on the London Metal Exchange had added 0.6% to $9,782 a tonne by 1000 GMT after falling by 1% on Friday.
China’s factory activity expanded in July at the slowest pace in 17 months, according to the official manufacturing Purchasing Manager’s Index (PMI).
“Copper is being supported by expectations of looser fiscal policy from China, which is slowing down, confirmed by the weak PMI, and also by supply tightness after the recent floods in China,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
“The outlook for all base metals is bullish in August, supported by a weaker dollar after the latest dovish comments from the Fed. There are all the conditions for a spike higher.”
Torlizzi said he had taken bullish positions in copper, aluminium and nickel recently and was targeting copper revisiting its record peak of $10,747.50, aluminium climbing to $2,700 and nickel rising to $21,000.
LME aluminium rose 1.3% to $2,624 a tonne, while nickel CMNI3> advanced 1% to $19,745.
* The dollar index lurched back towards the one-month lows hit last week, making dollar-priced metals cheaper to holders of other currencies.
* The union of workers at BHP Group Ltd’s Escondida copper mine, the world’s largest, rejected the firm’s final labour contract offer.
* U.S. senators finalized details on Sunday of a sweeping $1-trillion plan to invest in infrastructure.
* LME cash zinc has moved to a premium of $1.50 over the three month contract CMZN0-3, the first time in over a year it has been more expensive, indicating tighter supply conditions.
* LME zinc rose 0.6% to $3,046.50 a tonne, lead gained 0.9% to $2,403.50 and tin edged up 0.3% to $34,740.
* For the top stories in metals and other news, click or (Additional reporting by Mai Nguyen in Hanoi Editing by Mark Potter)