Base metals rise as Chinese housing worries ease

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Industrial metal prices rose on Monday on Chinese regulators’ latest effort to avert a potential crisis in the country’s real estate market, which consumes a vast amount of metals.

Three-month copper on the London Metal Exchange rose 1.7% to $7,131.50 a tonne by 0401 GMT, rebounding from its lowest since November 2020 of $6,955 a tonne hit in the previous session.

The most-traded August copper contract on the Shanghai Futures Exchange advanced 2.6% to 56,040 yuan ($8,306.41) a tonne.

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ShFE tin climbed 4.7% to 195,070 yuan a tonne, zinc added 3.5% to 22,650 yuan a tonne, lead was up 3.3% at 14,995 yuan a tonne and aluminum rose 2.3% to 17,685 yuan a tonne.

LME aluminum climbed 0.8% to $2,361.50 a tonne and zinc advanced 2.3% to $2,982 a tonne.

Chinese regulators encouraged lenders to extend loans to qualified real estate projects to ease risks from a widening mortgage-payment boycott on unfinished houses, which helped property and bank stocks recover some recent losses.

“(Metals prices falling) was a risk-off pull back due to the fear of more developers going under. Developers in China are having a relief rally… so the construction project cliff is averted for now,” said a trader.

Easing of a red-hot rally in dollar also helped metal prices, which are traded in the U.S. currency on the LME.

Global miner BHP Billiton is likely to reconsider its investment plans in top copper producer Chile if the government moves ahead with mining tax hikes, according to a report on Sunday.

CMOC’s Tenke Fungurume copper and cobalt mine has suspended all exports, logistics companies were told in a notice seen by Reuters late on Saturday, complying with demands by a court-appointed administrator.

* For the top stories in metals and other news, click or ($1 = 6.7466 yuan) (Reporting by Mai Nguyen in Hanoi; editing by Uttaresh.V)