Copper Climbs on China Stimulus Plans

By Christopher Alessi and Amrith Ramkumar

Copper and other base metals rose Tuesday after China approved new fiscal measures to bolster its economy.

Front-month copper for July delivery climbed 2.3% to $2.80 a pound on the Comex division of the New York Mercantile Exchange, its best day since April 18. Prices have fallen 15% since hitting a four-year high in late June, hurt by worries that a trade spat between the U.S. and China would hurt the Chinese economy and lower commodity demand. China is the world's largest consumer of industrial metals used for construction.

Other industrial metals that have slid recently, including aluminum, zinc and nickel, rose on the London Metal Exchange.

The rebounds came after China's cabinet, the State Council, unveiled measures to boost domestic consumption amid economic pressure from escalating trade friction with the U.S. The news also lifted shares of Chinese companies that have fallen on worries about an economic slowdown, and analysts said momentum carried over to the metals market.

"Onshore metals have gained overnight in sympathy with a pickup in China stocks, in particular industrials," said Alastair Munro, an analyst at brokerage Marex Spectron.

Traders have said moves in Chinese markets have been dictating metals trading lately, with prices on the LME and in U.S. trading taking their cues from what happens earlier on the Shanghai Futures Exchange.

Among precious metals, front-month gold for July delivery swung between small gains and losses and closed down less than 0.1% at $1,223.90 a troy ounce, near its lowest level of the year. A strong dollar has made gold more expensive for overseas buyers, and some analysts expect rising Treasury yields to make the yellow metal less attractive to investors.

Write to Christopher Alessi at [email protected] and Amrith Ramkumar at [email protected]