METALS-Shanghai copper surges on China's plan to expand strategic reserves

Feb 4 (Reuters) - Shanghai copper rose on Wednesday as investors reacted to China's plan to expand its strategic reserves.

The most-active copper contract on the Shanghai Futures Exchange SCFcv1 surged 3.47% to close daytime trading at 105,160 yuan ($15,159.29)a metric ton.

The benchmark three-month copper on the London Metal Exchange CMCU3 was down 0.1% at $13,464.50 a ton as of 0700 GMT, holding on to most of Tuesday's gain, which was its best daily percentage rise since April 2022.

The previous session's gain came after copper joined a two-session plunge in metals led by gold XAU= and silver XAG= to lose as much as 15% from its record set on Thursday at $14,527.50 a ton.

Meanwhile, China will expand its copper strategic reserves, an official at the state-backed China Nonferrous Metals Industry Association said on Tuesday, adding that it will also explore creating a commercial stockpiling system led by state-owned enterprises.

State-backed research house Antaike, however, urged investor caution.

"The exploration of a commercial stockpiling mechanism and research into the feasibility of copper concentrate reserves remain preliminary ideas under discussion among relevant companies and market participants within the industry," it said in a WeChat article on Wednesday.

Several traders and analysts also cautioned against over-interpreting the announcement, suggesting it may be about longer-term intention rather than any immediate plan to enter the market. They spoke on condition of anonymity given the sensitivity of stockpiling in China.

Elsewhere, Shanghai tin SSNcv1 concluded a three-day plunge, rising 5.03% to close at 392,080 yuan a ton, while London tin SSNcv1 dipped 1.09% to $49,575, after reclaiming the $50,000 mark previously.

Nickel also climbed. Shanghai nickel SNIcv1 gained 3.78% to 137,680 yuan a ton, and the London benchmark nickel contract CMNI3 gained 0.91% to $17,605.

Both Goldman Sachs and Macquarie lifted their average 2026 nickel price forecasts to above $17,000 level on Tuesday, citing tightened supply from top producer Indonesia.

Among other SHFE base metals, aluminium SAFcv1 climbed 1.85%, zinc SZNcv1 ticked 0.08% lower and lead SPBcv1 dipped 0.30%.

Elsewhere on the LME, aluminium CMAL3 rose 0.29%, zinc CMZN3 added 0.37%, and lead CMPB3 nudged 0.13% higher.

($1 = 6.9370 Chinese yuan renminbi)