Bloomberg cited copper gained after Premier Mr Wen Jiabao as saying that China will intensify fine tuning of economic policies and data showed inflation was lower than expected in June boosting speculation the largest user may boost stimulus.

Three month metal rose for the first time in 4 days, gaining as much as 0.4% to USD 7,560 per tonne on the London Metal Exchange and trading at USD 7,557.75 in Shanghai. Copper for October delivery on the Shanghai Futures Exchange lost 1.1% to CNY 55,130 per tonne.

The National Bureau of Statistics said that China’s consumer price index gained 2.2% from a year ago. That compared with a median forecast of 2.3 percent in a Bloomberg survey and rise of 3% in May.

Mr Wen said that downward pressure on the economy is still relatively large. China’s central bank cut interest rates last week for the second time in a month.

Mr He Shan an analyst at Galaxy Futures Company said that “The low inflation level actually gives room for further easing which is exactly what market participants are looking for.

According to the US Commodity Futures Trading Commission, September delivery copper rose 0.4% at USD 3.426 per pound on the Comex. Net short positions or wagers on falling prices held by funds were 13,770 futures and options contracts as of June 26th 2012 compared with 11,897 per week earlier.

On the LME, nickel advanced 1.4% to USD 16,372 per tonne, zinc gained 0.5% to USD 1,852.75 per tonne and tin climbed 0.3% to USD 18,550 per tonne. Lead rose 0.3% to USD 1,865 and aluminum was little changed at USD 1,897 per tonne.

Source - Bloomberg

(www.steelguru.com)