The building in Muhaisnah 4 had suffered structural damage last week and has been sealed off as authorities conduct investigations
After all-night talks, the leaders of the 17-nation currency bloc agreed that euro-area rescue funds could be used for sovereign debt purchases without forcing countries to adopt extra austerity measures.
News of the deal triggered a rally in the euro, as the dollar fell against a basket of currencies, commodities and equity markets in Europe and Asia jumped.
“Clearly the reason for the rally in base metals is to do with the overnight news from the European meetings, and the consequent sharp impact on the dollar/euro exchange rate,” BNP Paribas strategist Stephen Briggs said. “I don’t think there is any other game in town.”
A weaker dollar makes commodities priced in the unit cheaper for holders of other currencies.
Three-month copper on the London Metal Exchange was up 2.2 percent at $7,545 per tonne by 1028 GMT. But it is still down nearly 11 percent on the quarter, its worst performance since the third quarter of 2011, and is down 20 percent so far this year.
Oil rose by more than $2 and gold jumped over 1 percent.
“It’s a relief rally that they seemed to achieve more than was expected. I suspect that people will now trawl over the details of this and there is likely to be a bit of pause while this is digested,” Briggs said.
“If the conclusion is that this is a genuine game changer then prices could start recovering in the second half of the year.”
While BNP Paribas said this month it had cut its base metals price forecasts for this year due to the economic uncertainty in Europe, it continues to see world base metals demand increasing by 4 percent to 5 percent over 2012.
In China, the world’s top consumer of copper, physical copper buyers have been restocking on a hand-to-mouth basis, capitalising on cheaper prices after Shanghai copper lost over 6,800 yuan from the year’s high of more than 62,000 yuan in February and a smaller LME-over-ShFE copper spread.
In a boost for the copper price, China’s central bank said it would use a basket of policy tools to keep credit and money supply growth at a steady and reasonable pace. China is the world’s top consumer of copper.
Separately, a finance ministry official said China could meet its 2012 economic growth target of 7.5 percent, despite early economic indicators suggesting growth did not pick up this month.
Adding to optimism about the country’s growth, global miner Rio Tinto said it expected Chinese growth to be above 8 percent, and that recent fiscal and monetary loosening should lead to a pick-up in growth in the second half.
But with base metals prices still languishing this year as the economic crisis grinds on, Russia’s Norislk Nickel , the world’s largest nickel miner, said it plans to cut its 2012 investment programme within a month.
“ There is little hope that prices for our metals will rise in the near term. Within a month we will have to revise down our investment plans for 2012,” Chief Executive Vladimir Strzhalkovsky told the company’s annual shareholder meeting.
Three-month nickel was up 1.9 percent at $16,518 from $16,215 at the close on Thursday, but is down more than 7 percent this quarter, and more than 11 percent so far this year.
“The near-term environment is likely to remain challenging for commodities until economic data point to improving activity more convincingly,” Credit Suisse said in a research note.
Three-month tin was up 1.9 percent $18,849 from $18,500, zinc was $1,834 from $1,794, lead was at $1,814 f r om $1,777 and aluminium was $1,868 from $1,845.
The building in Muhaisnah 4 had suffered structural damage last week and has been sealed off as authorities conduct investigations
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