Copper futures spurt on global cues

China’s central bank cut interest rates on Friday for the sixth time since November, lowering the one-year benchmark bank lending rate by 25 basis points to 4.35 percent. On the other hand, Copper gained with the rise of 1.71 percent followed by Nickel (0.82 percent).

For the first seven months of the year, the global copper market had a surplus of 8,000 tonnes compared with a deficit of 563,000 tonnes in the same period a year earlier, figures from the worldwide Copper Study Group (ICSG) showed on Tuesday.

“The rate cut is quite important since it confirms the stimulus direction of the Chinese government”, said Eugen Weinberg, head of commodity research at Commerzbank in Frankfurt.

“Prices in the market are nearly stagnant and most days there is not a lot of movement – you do get short-covering from time to time, and that is what we are seeing today”, a trader said.

Base metals were mostly higher on light corrective buying during Thursday LME premarket trading but further upside potential looks limited, traders said.

Copper prices have been under pressure in recent weeks amid mounting concerns about demand from China, the world’s no. 1 copper buyer.

Weinberg said cutback announcements by big players such as Freeport and Glencore was significant.

Among the metals, copper was able to rebound back above $5,200 amid news of a strike at Chinalco’s Peruvian copper mine but the aluminium market touched a new two-month low. They rose 1.22 percent to trade at $5,319.50 a ton Friday on the London Metal Exchange, before backsliding one percent.