LONDON (Commodity Online): Sentiment for base metals has been helped by hopes for an agreement in Greek debt talks, which has caused the U.S. dollar to slide, said Commerzbank in a research note.
Coupled with firm Asian equity markets, this is reflected in rising metal prices. Prices are also finding support from reduced fears that the real estate market in China will implode and drag the entire economy down with it, Commerzbank added.
“This is because the Chinese central bank has announced its intention of supporting property buyers and developers, for example, by making sufficient loans available. This is accompanied by the Chinese government’s plan to build 36 million affordable homes and social housing units by 2015. These measures show that China has sufficient fiscal and monetary policy capacity to prevent a significant cooldown and, above all, a ‘hard landing’ of the local economy,” Commerzbank continued.
The housing program and other infrastructure measures should mean high demand for metals in the medium to long term, the bank says. However, Commerzbank cautions that a sharp inventory build in Shanghai Futures Exchange copper stocks to some 180,000 metric tons in the last two weeks should could weigh on prices in the short term.
As of 8:44 a.m. EST, LME three-month copper was up $169 to $8,650 a metric ton. Aluminum, nickel, zinc, lead and tin were also higher.
