BASE METALS: Copper Gains on Prospect of Virus Lockdowns Easing

Yvonne Yue Li

27 May 2020, 08:33 AM IST

(Bloomberg) -- Copper led most metals higher in London as the prospect of easing coronavirus lockdowns and more stimulus measures from China outweighed geopolitical threats.

Merck & Co. unveiled development plans on both a treatment and vaccine for Covid-19, while the British government is planning to start lifting some retail restrictions in June. People’s Bank of China Governor Yi Gang said the central bank will focus on five measures to support credit provision to the real economy, following the government’s announcement of more “direct” support in its annual policy blueprint released last week.

BASE METALS: Copper Gains on Prospect of Virus Lockdowns Easing

Drivers
Oil’s recovery from its historic crash last month is barreling ahead, with some OPEC producers displaying signs of confidence that the market is stabilizing China’s imports of zinc ore rose to 460,647 tons in April, second-highest monthly volume on record More China import numbers here READ: Aluminum ‘Depressed’ For Medium-Term on Surplus: Morgan Stanley Beijing condemned Washington for adding 33 Chinese entities to a trade blacklist The U.S.-China relationship has worsened dramatically in the past few months, partly as America has became one of the countries worst hit by the coronavirus pandemic Wuhan, the hub of China’s coronavirus outbreak, said it tested almost 7 million people in 12 days, after several infections prompted worries about a second wave

Drivers

Oil’s recovery from its historic crash last month is barreling ahead, with some OPEC producers displaying signs of confidence that the market is stabilizing
China’s imports of zinc ore rose to 460,647 tons in April, second-highest monthly volume on record
- More China import numbers here
READ: Aluminum ‘Depressed’ For Medium-Term on Surplus: Morgan Stanley
Beijing condemned Washington for adding 33 Chinese entities to a trade blacklist
- The U.S.-China relationship has worsened dramatically in the past few months, partly as America has became one of the countries worst hit by the coronavirus pandemic
Wuhan, the hub of China’s coronavirus outbreak, said it tested almost 7 million people in 12 days, after several infections prompted worries about a second wave

Prices
Copper +1.4% to settle at $5,362/ton at 5:51 p.m. on the London Metal Exchange, after a one-day trading pause for a U.K. public holiday Comex copper for July delivery +1.3% to $2.4185/lb from Friday’s close after there was no settlement Monday due to a holiday in the U.S. Most other LME metals advanced, with lead up 2.5%; zinc slipped 0.2%

Market Commentary
“As lockdowns are lifted, the world seems a better place if only for now,” Alastair Munro at Marex Spectron says in an emailed note With crude oil continuing its rally, “any fears around rising U.S.-Sino tensions are on the back burner” “Positive sentiment towards a reopening of economies and additional stimulus measures China’s taking” supported the base-metals complex, Natalie Scott-Gray, an analyst at INTL FCStone, says in an emailed note As global economies reopen, TD Securities’ real-time commodity demand indicator “continues to confirm that demand for raw materials is strengthening,” TD analysts including Ryan McKay say in an emailed note

Market Commentary

“As lockdowns are lifted, the world seems a better place if only for now,” Alastair Munro at Marex Spectron says in an emailed note
- With crude oil continuing its rally, “any fears around rising U.S.-Sino tensions are on the back burner”
“Positive sentiment towards a reopening of economies and additional stimulus measures China’s taking” supported the base-metals complex, Natalie Scott-Gray, an analyst at INTL FCStone, says in an emailed note
As global economies reopen, TD Securities’ real-time commodity demand indicator “continues to confirm that demand for raw materials is strengthening,” TD analysts including Ryan McKay say in an emailed note