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The most-traded February copper contract on the SHFE traded at 49,190 yuan ($7,125) per tonne as at 10.19am Shanghai time, up by 0.2% or 100 yuan per tonne from Tuesday’s close.
Sentiment in commodity markets received a boost from the news that China plans to slash import tariffs on US automobiles from 40% to 15%, wiping out a tax imposed earlier this year in response to US measures.
In addition, Canada on Tuesday released on bail Meng Wanzhou, chief financial officer at Chinese telecoms giant Huawei, which signaled a further easing of trade tensions.
Moreover, positive data releases from China on Tuesday which showed lending rose last month also boosted market sentiment, according to ANZ Research.
“Aggregate financing rose to RMB1.52trn, well above the forecast while new yuan loans rose more than expected to RMB1.25trn,” ANZ Research said in a morning note.
Prices were also supported by further falls in inventories.
“Total LME [copper] stocks continue to see drawdowns, with net holdings edging to a fresh 2018 low of 122,500 tonnes,” Fastmarkets analyst Andy Farrida said in a research note, adding that expected tightness will provide a bullish backdrop for the red metal.
Deliverable copper stocks at SHFE-approved warehouses dropped by 5% week on week, or 7,163 tonnes, to 123,879 tonnes in the week ended December 7. Stocks have now fallen by 60% from the 2018 high of 307,435 tonnes reached on March 23, but are still 12% higher than the annual low of 111,029 tonnes from September 21.
Base metals prices
Currency moves and data releases