Copper pulls back on disappointment over China's fiscal support
Updates with official prices, adds nickel inventories
By Eric Onstad
LONDON, Nov 8 (Reuters) -Copper prices retreated on Friday on disappointment over the extent of fiscal stimulus measures announced by top metals consumer China to reboot its lacklustre economy.
Three-month copper CMCU3 on the London Metal Exchange (LME) fell 2.2% to $9,456 a metric ton in official open-outcry trading after a volatile several days following the U.S. election, including a 3.4% rebound on Thursday.
The support package announced by China on Friday eases debt repayment strains for local governments and signalled further stimulus in the pipeline for its sputtering economy.
"The market clearly was disappointed; they want more from China," said Nitesh Shah, commodity strategist at WisdomTree.
"The expectations were set very high and there were lots of warm words by officials about fiscal policy support, but markets are growing impatient."
Investors have been worried about threats made by incoming U.S. President Donald Trump to impose stiff tariffs on China, which could dampen metals demand.
"I'm interpreting today's announcement as, rather than announce large stimulus pre-emptively, China waiting to see what trade restrictions come and keeping some dry powder aside to stimulate at that point," Shah added.
The most-traded December copper contract on the Shanghai Futures Exchange SCFcv1 closed 1.5% up at 77,100 yuan ($10,753) a ton ahead of China's stimulus announcement.
"The 6 trillion (yuan) announced today to immediately address and resolve local debt, compared to the initial 12 trillion expected, has seen markets sliding," said a trader in Asia.
Helping to cushion the losses was weekly data showing copper inventories in SHFE warehouses fell about 9%, a sign of improving demand.
LME nickel CMNI3 dropped 1.4% to $16,355 a ton after inventories extended gains to 150,336 tons, the highest level in more than three years, having doubled over the past seven months. MNISTX-TOTAL
"Nickel’s short-covering rally paused as stock builds resume in Asian warehouse locations," said a note from broker Marex.
Among other metals, LME aluminium CMAL3 shed 2.2% to $2,635 a ton, zinc CMZN3 gave up 2% to $2,990, lead CMPB3 dipped 0.3% to $2,031.50 and tin CMSN3 slipped 0.5% to $31,650.
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($1 = 7.1699 yuan)
Reporting by Eric Onstad
Additional reporting by Mai Nguyen in Hanoi
Editing by Jan Harvey and David Goodman
For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C
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