London copper was steady on Wednesday after prices fell the most in a day since November in the previous session when grim China February trade data renewed fears over economic growth in the world’s top consumer of metals.
“The market has been short, we’ve had a recovery. Copper has been trying to break to the upside and now it’s consolidating its gains,” said chief investment officer Jonathan Barratt of Ayers Alliance in Sydney, Reuters reported.
If commodity prices can maintain gains after a 30% rally in raw materials costs like iron ore, it’s a positive sign the global economy is strengthening, he said. “The key will be the follow up data this weekend.”
The first reading for China’s industrial output this year is due at the weekend. Output is expected to increase by 5.6% for January and February, down from a 5.9% expansion in December.
China’s February trade performance was far worse than economists had expected, with exports tumbling the most in over six years, days after top leaders sought to reassure investors that the outlook for the world’s second-largest economy remains solid.
Three-month copper on the London Metal Exchange traded flat at 4,854.50 a ton in modest volumes, having shed 2.6% in the previous session in its biggest one day slide since Nov. 16.
Shanghai Futures Exchange were down 2.6% at 37,000 yuan ($5,679) a ton.
LME nickel plunged more than 8% on Tuesday, recouping just 1.6% on Wednesday.
Shanghai contracts failed to move off their lows, with zinc and lead down almost 3% and tin down 4%.
More support may come from metals via fresh easing steps out of Europe. Financial markets expect the European Central Bank to cut its deposit rate by at least 10 basis points and expand its asset-buying program this week, but they still do not expect it to hit its inflation target in the near future.
Russia’s Rusal Plc reported a 53% slide in fourth-quarter core profit on Wednesday and said it expects a strong increase in demand for aluminum in 2016 and sees Chinese output growth slowing sharply.
New Caledonia is weighing lifting restrictions on the sale of nickel ore to China as world prices for the metal tumble and the future of a key Australian customer is in doubt.
