Copper gains in London as Yuan holds

Copper rose in London on speculation that a stronger yuan will increase demand from China and as the country removed export rebates, likely reducing sales... More Below... Posted by on Jun 23rd, 2010 and filed under Finance.

Copper rose in London on speculation that a stronger yuan will increase demand from China and as the country removed export rebates, likely reducing sales abroad.

After falling as much as 1 percent earlier on the London Metal Exchange, three-month delivery copper added 0.3 percent to $6,630 a metric ton. Zinc advanced as much as 1.3 percent to $1,818 a ton after losing by the same percentage earlier.

China’s yuan held this week’s gains against the dollar on speculation the central bank is allowing a stronger currency to curb inflation after ending a two-year peg. In a statement on its Web site yesterday, China’s Ministry of Finance said that rebates on some copper, zinc, lead, nickel, and tin products such as tubes and wires will be removed from July 15. Announced amid increasing trade complaints from the US and the European Union, the tariffs change also affects steel products, of which China is the largest producer.

(article source: Bloomberg Businessweek, photo source: The Daily Telegraph)

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