SHANGHAI, Jun. 27 (SMM) – The People’s Bank of China (PBOC) has injected money to some qualified financial institutions to help ease the liquidity squeeze with the fears arising from the cash crunch further hurting China’s financial markets.
This caused China’s stocks and futures markets to rebound following sharp declines. However, the PBOC with remain tight control over market liquidity in the long run.
In the US, the durable goods orders beat forecast rising 3.6% in May due to stronger demand for planes and machinery, while May’s new home sales increased to an annual rate of 476,000 to their highest since July 2008, indicating the recovery in housing market. June’s consumer confidence index climbed to 81.4, compared with the 74.3 finalized for May.
The positive economic data helped shore up market confidence in a US recovery, driving up both the US dollar and base metals.
LME Price Reviews
Base Metals Rose on PBOC Money Injection
The PBOC’s move to inject money to ease liquidity and above-expected US dollar resulted in rebounds in LME base metals prices Tuesday, with the LME three-month copper contract price closing USD 6,767/mt, up 0.92% before falling to the lowest level since July 2010 of USD 6,602/mt.
LME aluminum price rose 0.45% to USD 1,778/mt, and LME zinc price closed at USD 1,846/mt, up 1.3%. LME lead price hit a low of USD 1,986/mt and finally closed at USD 2,050/mt, up 2.24%. LME nickel price ended at USD 13,900/mt up 1.76% before dipping to a low last seen in June 2009 of USD 13,525/mt.
China NPI Industry Faces Further Consolidation
Yang Zhiqiang, president of Jinchuan Group, said at the LME Week Asia in Hong Kong that China’s NPI industry may see further consolidation due to the Indonesia’s ban on nickel ore exports and falling nickel prices.
He noted that NPI producers will be largely affected by Indonesia’s ban on nickel ore exports, with some expected to suspend NPI production and carry out other businesses.