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The most-traded June copper contract on the SHFE stood at 49,640 yuan ($7,403) per tonne as at 10.10am Shanghai time, up by 360 yuan per tonne or 0.7% compared with Friday’s close of 49,280 yuan per tonne.
Better-than-expected monetary data from China on Friday spurred a broad improvement in risk appetite across markets, with this translating into follow-through strength for the SHFE base metals this morning.
China’s new bank loans rebounded in March, rising far more than expected with an increase of 1.69 trillion yuan. This considerably outstripped the forecast of 1.2 trillion yuan, according to data released by the People’s Bank of China on Friday.
Meanwhile, the country’s broad M2 money supply grew by 8.6% year on year in March – the highest in 13 months.
“China’s monetary data was better than expected in March, with the strength reflecting the stimulatory measures flowing into lending and credit metrics,” Felicity Emmett, senior economist at Australia and New Zealand Banking Group (ANZ), said in a morning note.
“The improvements in credit data mitigated some of the anxiety around China’s 7.6% year on year drop in imports for March,” Emmett added.
Chinese exports rebounded last month but imports shrank for a fourth consecutive month and at a quicker pace; China’s exports rose by 14.2% in March from a year earlier, customs data showed on Friday. It was the strongest growth in five months and significantly quicker than the 7.3% gain that had been forecast.
On the other hand, China’s imports declined by 7.6% in March from a year earlier, more than the expected 1.3% fall and steeper than February’s 5.2% drop.
Despite this, China’s appetite for copper remained strong last month.
Chinese imports of copper concentrate rose by 24.9% year on year to 1.8 million tonnes in March, customs data showed.
“When combined with primary copper and products, total imports of copper was up 12.4% year on year; this should dispel any myths that copper demand has been soft in China post the Chinese New Year holidays,” ANZ Research analysts noted.
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