Chinese Premier Li Qiang’s statement that China’s second-quarter economic growth will be higher than that of the first quarter and that he gave more encouraging messages also energized the commodity market.
Speaking at the World Economic Forum, Li said that more pragmatic and effective measures would be taken to support domestic demand. After the announcement, iron ore rose close to 3 percent.
Industrial metals rallied at the beginning of the year with the reopening of the Chinese economy after the pandemic, but the rally was stalled in this quarter due to problems in the manufacturing and real estate sectors in the country. Although the People’s Bank of China cut interest rates this month to stimulate the economy, investors expect more steps to be taken.
Copper rose 0.6 percent to $8,438.50 per ton on the London Metal Exchange, while aluminum, zinc and nickel rose more than 1 percent.
Iron ore in Singapore was up 2.9 percent at $112.25 a tonne.
Navigate Commodities Manager Atilla Widnell stated that there was a rise in anticipation of more incentives and said, “Excessive optimism towards China may cause upward price shocks. This rise can also create a sales opportunity.”