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COPPER - LONDON. London copper prices rose to a three-week high on Wednesday on reinforced hopes of more stimulus measures from top metals consumer China after it cut the amount of cash that banks must hold as reserves.
Three-month copper on the London Metal Exchange (LME) was up 1.7% at $8,551 per metric ton in official open-outcry trading after hitting its highest since Jan. 2, breaking above the 21-day moving average's resistance level of $8,443.
"Industrial metals extended gains as China unveiled a plan to cut reserve requirement ratio for banks. Hopes for more stimulus from Beijing are also supporting," said Ewa Manthey at ING.
The U.S. dollar weakened, making greenback-priced commodities more attractive for buyers using other currencies, while daily LME data showed a decline in copper stocks, providing additional support.
Benchmark LME aluminium was up 0.7% at $2,243 in official activity after touching its Jan. 8 high of $2,268, as traders continued to gauge risks of potential European Union import sanctions on major producer Russia.
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Poland and the Baltic states called for the EU to ban Russian aluminium and liquefied natural gas imports over Moscow's invasion of Ukraine, a Polish official told Reuters on Tuesday.
"This could potentially lead the LME to reopen the debate over whether it should ban deliveries of Russian metal (to the LME-registered warehouses)," Manthey said.
The share of available aluminium stocks of Russian origin in LME-registered warehouses was at 90.4% in December.
LME zinc climbed 2.1% to $2,572 a ton, lead was steady at $2,167.5, tin added 0.9% to $26,470 and nickel rose 0.7% to $16,425.
The near-term supply of LME lead is getting tighter, as implied by the discount of cash contract to the three-month contract shrinking to $0.9 a ton as of Tuesday's market close from $33.5 a week ago.
