Copper and ferrous metals were mixed as investors try to gauge the outlook for the Chinese economy amid slowing growth and the potential for stimulus next year.
Shanghai copper edged lower after reaching the highest in a month on Tuesday, while the metal in London climbed after a two-day trading break. Iron ore futures in Singapore and China declined for a third day.
China’s economy expanded at a moderate pace in December on better business sentiment, although a slump in the property sector and weakening external demand continue to cloud the outlook, according to Bloomberg’s aggregate index of eight early indicators for this month. Property accounts for large proportions of demand for base metals and steel.
At the same time, to counter the slowdown, China is likely to add stimulus to stabilise growth next year. The People’s Bank of China is set to use monetary policy tools to ensure liquidity, while the finance ministry has said it will roll out fiscal policies.
In the latest virus developments, China continues to deal with a cluster of Covid-19 cases concentrated in the city of Xi’an. This is amid a global surge in cases to a daily record, with hospitalisation rates soaring in various countries.
The most-active copper contract in Shanghai fell 0.3% while prices in London gained 0.8%. Iron ore futures in Singapore declined 1.4% to $116.90 a ton after capping a sixth weekly gain, while steel rebar and hot-rolled coil futures were steady in Shanghai.