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Copper prices shot up 3% on Wednesday on relief that China’s debt-burdened Evergrande would pay interest on a domestic bond, easing fears that the property giant’s troubles might hit the global economy.
Three-month copper on the London Metal Exchange CMCU3 had climbed 3.4% to $9,277 a tonne by 1000 GMT, reversing losses from the previous session when the contract went as low as $8,810 a tonne, its weakest since Aug. 19.
An Evergrande 3333.HK unit said it would make a bond interest payment on Sept. 23 after private negotiations with bondholders.
“That heartened markets for the time being and we’re running into some dip buying. Consumers are probably running short of inventory, so these prices may prompt restocking,” said independent consultant Robin Bhar.
“I think the consensus is that this is not China’s Lehman moment. When it comes to China, everyone owns part of the problem and at the end of the day, it’s all part of China plc. They’re not going to let it disrupt the economy.”
Risk sentiment was also supported by the People’s Bank of China injecting more liquidity into the market to replace certain expiring loans.
The most-traded October copper contract on the Shanghai Futures Exchange SCFcv1 closed down 0.9% at 68,780 yuan ($10,636.19) a tonne, catching up with losses in London during the previous two sessions when Chinese markets were closed for a public holiday.
* LME aluminium CMAL3 climbed 1.7% to $2,894.50 a tonne, nickel CMNI3 rose 1.1% to $19,030, zinc CMZN3 advanced 1.5% to $3,024, tin CMSN3 jumped 3.9% to $35,150, but lead CMPB3 fell 0.4% to $2,125.
* A Chilean court handed a reprieve to BHP’s BHP.AX Cerro Colorado copper mine, agreeing to suspend a ban on it pumping water from an aquifer for 90 days.
* Peru wants to revise the framework for the country’s mining industry, redrafting the umbrella law that regulates the sector, as well as the legislation that sets royalty payments.
* Jiaozuo Wanfang Aluminum Manufacturing Co Ltd 000612.SZ in central China’s Henan province said primary aluminium output affected by floods would resume by the middle of November.