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Copper Gains First Day in Four on Stronger U.S. Economic Data
Feb 18,2011 14:49CST
industry news
Source:SMM

Feb. 18 (Bloomberg) --Copper pared a second weekly drop after reports from the U.S. showed manufacturing gathered pace this month, spurring speculation demand may gain in the second- largest consumer. Aluminum, zinc and lead also climbed.

The metal for three-month delivery on the London Metal Exchange rose for the first time in four days, advancing as much as 1.2 percent to $9,921 a metric ton. It traded at $9,875 by 12:22 p.m. Shanghai time. Copper for May delivery on the Shanghai Futures Exchange climbed 0.2 percent to 74,800 yuan ($11,370) a ton by the midday break.

"It’s still in a correction mode, but positive economic data can offer some support from time to time,” Pang Ying, a trader at Shenzhen Rongtop Trading Co., said by phone.

The Federal Reserve Bank of Philadelphia’s general economic index, a gauge of manufacturing, rose to 35.9 in February, the highest level since January 2004, and beat the median forecast of 21 in a Bloomberg News survey of economists. Separately, the Conference Board’s index of U.S. leading indicators rose in January for the seventh straight month, signaling the expansion will extend into this year.

"The bearish range breakout along with the bearish momentum roll is viewed as a healthy correction within the longer-term bull trend,” said Barclays Capital in a note yesterday. Buying interest is likely at about $9,600, it said.

The Conference Board Leading Index for China declined 0.5 percent in December to 154.3, the New York-based research organization said on its website today. The measure fell for the first time since 2008.

Mixed Data

It’s "too early to tell” if the world’s second-biggest economy will have an economic slowdown, Jing Sima, an economist for the Conference Board, said in a press release. "While the construction and consumer sectors are weakening, growth in the industrial sector remains strong.”

China’s January home prices remained steady after the government rolled out a series of curbing measures, data released by the National Bureau of Statistics showed today.

"The new data clearly shows home prices are still rising and the government curbs only suppressed transaction volumes,” said Jinny Yan, a Shanghai-based economist at Standard Chartered Plc. "If the liquidity is not tightened, it would be impossible for home prices to fall.”

"We do view credit rationing and a substantial rise in the reserve requirement ratio of banks as a greater immediate negative impact to commodity prices,” Walter de Wet, an analyst at Standard Bank Plc said in a research note yesterday.

Aluminum in London rose 0.6 percent to $2,528 a ton, zinc gained 1.3 percent to $2,544 a ton, and lead climbed 1.4 percent to $2,620 a ton. Nickel added 0.4 percent to $28,600 a ton, and tin advanced 0.7 percent to $31,880 a ton.

 


 

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