Copper gets shot in the arm from China central bank move

Also weighing on the market was a slightly firmer dollar index

  

LONDON- Copper prices got a boost on Monday after top metals consumer China cut its reserve requirement for banks, fanning hopes for stronger economic growth and industrial metals demand.

Three-month copper on the London Metal Exchange had gained 0.3% to $9,449.50 a tonne by 1030 GMT after trading in the red earlier and slipping 0.8% on Friday.

China's central bank said it would cut the amount of cash that banks must hold as reserves, its second such move this year, releasing long-term liquidity to bolster slowing economic growth. 

"It's been expected, but it will certainly stabilise sentiment for growth prospects and help provide support for base metal prices," said Xiao Fu, head of commodity market strategy at Bank of China International.

"China still has a lot of ammunition to stimulate the economy further, but they will do it in a very measured manner."

Worries about the global spread of the Omicron variant of the coronavirus, however, dampened upside momentum, traders said. 

Also weighing on the market was a slightly firmer dollar index =USD , making greenback-denominated commodities more expensive for those buying with other currencies.

* LME aluminium fell 1.1% to $2,593 a tonne after LME on-warrant inventories  rose to 698,550 tonnes, the highest since Sept. 23, having gained 21% in less than a week.

* Speculators cut their net long positions on copper on COMEX to 13,382 contracts, as of Nov. 30, latest exchange data showed, the lowest since Aug. 24. They boosted short positions to 39,240, the highest since June 15.

* LME zinc slipped 0.6% to $3,142, nickel shed 1.1% $19,805, tin gave up 0.8% to $39,010, but lead added 0.6% to $2,223.50.

* For the top stories in metals and other news, click TOP/MTL or MET/L

(Additional reporting by Eileen Soreng in Bengaluru and Mai Nguyen in Hanoi; editing by Carmel Crimmins) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))


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