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Hopes of U.S. Stimulus Package

Logo - The Daily Drill - Digging Deep for precious metal news

By Zandi Shabalala

LONDON, March 13 (Reuters) - Industrial metals rose on Friday, boosted by expectations of a stimulus package from the United States to protect the world's largest economy from the impact of the coronavirus and as China announced further economic measures.

But copper was still heading for a third straight weekly decline and most other metals were also set to end the week lower.

U.S. lawmakers and the White House neared agreement on a coronavirus economic aid package, with House Speaker Nancy Pelosi saying she hoped to announce a deal on Friday.

The world's biggest metals consumer China meanwhile said it was cutting for the second time this year the amount of cash some banks must hold as reserves, releasing 550 billion yuan ($79 billion) in liquidity.

"You have these stimulus hopes which have been in the market for a long time and today China coming up with more targeted approach to help the economy," ING Bank's senior commodity strategist Wenyu Yao said.

"That is helping copper and other base metals to recover from yesterday's collapse."

Benchmark copper on the London Metal Exchange (LME) gained 2% to $5,547 per tonne in official trading rings. Earlier, it fell to $5,319.50, its lowest since November 2016.

But the metal, widely used in power and construction, was still on track for its third straight week of decline.

LME SLIPS: The LME index of major contracts is at its lowest since November 2016 and has declined 9.3% so far this year.

COPPER INVENTORIES: Copper stocks in warehouses certified by the LME <MZNSTX-TOTAL> continued a steady trend of decline, shedding 3,750 tonnes to 183,700 tonnes.

In China, inventories of copper jumped to their highest since March 2016, up 10% to 380,085 tonnes, according to weekly data from the Shanghai Futures Exchange on Friday. <CU-STX-SGH>

The jump comes amid signs China's production is holding up even as demand struggles to recover from the impact of the coronavirus.

CHINA MEASURES: China's state planner on Friday announced guidelines to boost residents' property income and improve consumer market supply, in an effort to promote consumption as the coronavirus crisis takes a toll on the economy.

TRUMP TARIFFS: U.S industry groups, lawmakers and even some government officials are reviving their previous request to U.S. President Donald Trump: cut tariffs on Chinese and other imported goods.

COPPER CHILE: Copper miners in top producer Chile are implementing measures to contain an eventual spread of the virus, while global copper smelting activities declined in February.

PRICES: LME aluminum was bid up 2.4% to $1,695 a tonne, zinc was bid 3.3% higher to $2,001, lead was bid up 0.6% to $1,785, tin was bid up 1.6% to $16,350 while nickel was bid 6.6% higher to $12,610, after touching its lowest since June 2019.

(Reporting by Zandi Shabalala, additional reporting by Mai Nguyen; editing by Barbara Lewis and David Evans)

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