GLNCY Glencore Plc (PK)

LONDON—Copper futures were higher in London on Wednesday, after signs from the Chinese government that measures are being considered to stimulate the economy of the world's largest consumer of the metal.

The London Metal Exchange's three-month copper contract was up 0.5% at $5,373 a metric ton in morning European trade, having hit a four-day high earlier in the session at $5,434.50 a ton.

Copper prices had soared on Tuesday to their biggest daily percentage gain in 2½ years, as Glencore PLC's decision to shut mines and an increase in Chinese imports prompted investors and analysts to ratchet back estimates for global supplies.

On Wednesday, Glencore and China were again the focus.

Markets around the world got a boost after China's Ministry of Finance said that it would roll out a "more forceful" fiscal policy to stimulate economic growth, such as allocating more funds for infrastructure projects and tax cuts for small businesses.

China consumes around 45% of global copper supply. A series of economic upsets in the Asian powerhouse has sparked market volatility in recent weeks.

Additionally, "the copper price is clearly still benefiting from the announcement made by Glencore, one of the world's largest commodity traders and mining producers," said Commerzbank in a note.

Glencore said on Monday it would suspend operations at two large African copper mines, equivalent to output of 400,000 metric tons, over the next 18 months.

In the short-term, the industrial metal is likely to see more price gains, analysts said, though these will likely be capped by the specter of China's economy slowing.

"There is room for the rallies to continue, but we would be wary of getting too bullish as further setbacks in China, or further contagion from China in emerging markets might not be that far away," said William Adams, head of research at Fastmarkets, in a note.

Among the other base metals, aluminum was up 1% at $1,647 a ton, zinc was up 1% at $1,655.50 a ton, nickel was up 0.8% at $10,080 a ton, lead was up 2% at $1,725.50 a ton and tin was up 0.3% at $14,900 a ton.

Write to Ese Erheriene at ese.erheriene@wsj.com

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(END) Dow Jones Newswires

September 09, 2015 07:45 ET (11:45 GMT)

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