Mining stocks were in demand on Monday as the price of copper rose above $6,000 a tonne for the first time since March after data showed China’s growth accelerating.
Freeport-McMoran, the world’s biggest publicly-listed copper producer, rose as much as 4 per cent to $13.09, while Antofagasta added 2.2 per cent to 878p after copper, which is used extensively in wiring and power networks, moved higher on the London Metal Exchange.
Copper for delivery in three months rose 1.4 per cent to a four-month high of $6,013 a tonne on news that China’s economy expanded at an annual rate of 6.9 per cent in the second quarter. China consumes around 50 per cent of the world’s copper.
A weak US dollar – the greenback hit a 10 month low against a basket of other commodities on Monday – lent further support to copper and commodity prices.
“With a good set of Chinese economic data this morning and a weak US dollar the markets only really had one way to go and up they went”, said Malcom Freeman of Kingdom Futures, a metals broker.
The gains for copper and other base metals including nickel and zinc came in spite of warnings from China’s President Xi Jinping about growing risks in the financial sector.
“The government announced that it would establish the State Council Financial Stability and Development Commission to oversee the financial sector,” said Matt Hasson of Numis Securities. “Managing a deleveraging while still maintaining growth might be tricky,” he said.