Most base metals climb on hopes of slower U.S. rate hikes, China stimulus

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BEIJING — Prices of most base metals rose on Thursday, as a softer dollar and the prospects of slower pace of U.S. rate hikes and further China stimulus measures lifted sentiment.

Three-month copper on the London Metal Exchange was up 1.8% at $7,777 a tonne, as of 0741 GMT, speeding up a rally seen since last Thursday.

The U.S. Federal Reserve raised rates by 75 basis point for the second consecutive meeting to rein in inflation, as was widely expected by the market.

Comments from Fed Chair Jerome Powell after the policy statement were seen as less hawkish, sparking hopes of a slower interest rate hike for the remaining time this year.

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“The hint of likely slower pace of rate hikes eased some worries over a continually aggressive Fed, but we are cautiously optimistic given metals demand outlook still depends on global economic performance,” a trader said.

Copper, with its wide application in different industries from power generation to transportation, is often used as an economic parameter.

The metal’s price has dropped amid an economic slowdown after hitting a record high in March.

A soft dollar also eased some pressure on metals, making it cheaper for holders of other currencies.

In other metals, LME aluminum gained 1.6% to $2,460.50 a tonne, zinc climbed 2.4% to $3,126.50, lead was up 1% at $2,033, while nickel dipped 0.4% to $21,730.

The market also hopes to see more stimulus on infrastructure projects that could strengthen metals’ demand after China’s Politburo meeting at the end of this month, where the country’s top decision-making body gathers to discuss economic policies for the rest of the year.

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“More stimulus will help bolster market confidence in the short term,” said He Tainyu, a copper demand analyst at CRU Group. “But pressure is here to stay if China’s exports and property markets remain weak in a longer run.”

The most-traded September copper contract on the Shanghai Futures Exchange rose 3% to 60,280 yuan ($8,937.65) a tonne.

ShFE aluminum jumped 4.1% to 18,775 yuan a tonne, lead climbed 0.7% to 15,305 yuan a tonne, tin advanced 1.3% to 195,230 yuan a tonne, while nickel gained 0.6% to 169,060 yuan a tonne.

For the top stories in metals and other news, click or ($1 = 6.7445 Chinese yuan renminbi) (Reporting by Siyi Liu and Emily Chow; Editing by Sherry Jacob-Phillips)

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