- Codelco slashes copper premiums amid ample supply - sources
- Euro zone businesses expand in Oct at fastest rate this year
- On-warrant LME zinc inventories slide by 31,275 tonnes
Updates with official prices
By Eric Onstad
LONDON, Oct 24 (Reuters) - Zinc led base metals higher on Monday, fuelled by a rise in risk appetite by investors, a retreat in the dollar from nine-month highs and stronger physical demand in top consumer China.
Benchmark zinc
CMZN3 on the London Metal Exchange failed to trade in official activity and was bid 1.9 percent higher at $2,303 a tonne, bouncing back from a 1.2 percent loss on Friday.
Zinc has been the top LME performer this year with gains of 43 percent on worries about shortages developing after closures and suspensions of mines.
"Metals are well supported by better sentiment after the dip in the dollar and return of risk appetite, displayed by stronger equity markets," said Eugen Weinberg, head of commodity research at Commerzbank in Frankfurt.
Also lifting the mood of investors was a survey showing business activity in the euro zone expanded at the fastest rate this year in October. (
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The dollar index
.DXY retreated from a nine-month high, trimming the price of metals priced in the greenback for buyers using other currencies.
Also supporting zinc was a slide in LME "on-warrant" inventories - those not earmarked for delivery from warehouses and so available to investors - of 31,275 tonnes or 7.4 percent.
MZNSTX-TOTAL.
The broader base metals sector has seen more buoyant physical demand from China after data showed last week a surge in the prices of homes, a key sector for metals.
"We may have a non-seasonal better pricing going into the end of the year because of the pickup in China infrastructure and property spending," said analyst Daniel Hynes of ANZ in Sydney.
Three-month LME copper
CMCU3 was bid up 0.1 percent to $4,640 a tonne, after posting a small loss in the previous session. LME copper prices hit a one-month low of $4,623.25 a tonne on Oct. 14.
Some analysts and investors were cautious, however, about China's economy after its banking regulator asked lenders to step up risk management of property loans amid record gains in house prices that have raised concerns of price bubbles. (
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"It's difficult to see more strong property price increases going forward, so we will see some slowing down of demand for metals from the property sector in China," Weinberg said.
Also helping cap the upside in copper was news that the world's biggest copper miner, Codelco
COBRE.UL, has slashed its 2017 physical copper premium to European buyers, reflecting expectations of ample copper supply. (
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LME aluminium
CMAL3 traded 0.5 percent higher at $1,633 in official rings; lead
CMPB3 gained 1 percent in official trading to $2,018; nickel
CMNI3 was bid 1 percent firmer at $10,060; and tin
CMSN3 was bid up 0.4 percent at $20,000.