Copper at 4.5-Month High
Source: Reuters, Michael Taylor (9/17/10)
"Copper for three-month delivery on the LME traded at $7,792.50/ton."
By 0951 GMT, copper for three-month delivery on the London Metal Exchange traded at $7,792.50 a ton from $7,700 at the close on Thursday. The metal used in power and construction, earlier hit $7,810, its highest level since April 26.
"Pretty impressive rise," said David Wilson, director of metals research at Societe Generale. "The fact that the Chinese central bank put out the announcement, is probably seized upon.
"It seems to have been taken as good news—if there is not tightening up, there will still be some lending. . .it's just a sentiment issue."
The People's Bank of China warned of mounting bad debt as the country's structural reforms accelerate, but reaffirmed its appropriately loose monetary policy stance and said it would employ various fiscal and monetary tools to manage inflationary expectations.
China is the world's top metals consumer and a major reason for copper's 140% gains last year.
On Thursday, India's central bank raised interest rates more than expected extending its fight against inflation, raising speculation that China may have to do the same.