Shanghai copper prices boosted by new loans data, monetary easing

Copper prices on the Shanghai Futures Exchange (SHFE) climbed slightly on Friday after the release of data showing that new loans surged in December.

New loans in December totaled 697.3 billion yuan ($112.31 billion), up 214.9 billion yuan year-on-year, figures from the People's Bank of China (PBC), the central bank, showed Thursday.

The data also showed that new lending in 2014 reached 9.78 trillion yuan, up 890 billion yuan from 2013.

The most-traded copper contract for March delivery on the SHFE closed at 41,040 yuan per ton, up 120 yuan from the previous trading day. The trading volume Friday was 656,280 lots, 364,358 lots lower than on Thursday. The contract was down 3,210 yuan, or 7.25 percent, on a weekly basis.

Copper prices declined to their lowest in more than five years at the beginning of last week as further weakness in the oil market continued to weigh on commodities, according to a Reuters report on January 2. Investors are worried about excessive copper supplies and speculators will continue selling, the Reuters report said.

However, copper rebounded toward the end of last week. "Copper's recovery from its lowest levels in 5.5 years is considered to be a mix of bargain-hunting, short covering and the surge in credit growth in China easing some demand concerns," according to a research note sent to the Global Times Friday by the Australia and New Zealand Banking Group.

"The data suggests monetary policy easing in China is working, but further easing is required as the economy continues to slow," the note also said.