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BASE METALS: Copper Resumes Rally On Stronger US Data
Jul 4,2011 09:46CST
industry news
Source:SMM

NEW YORK, Jul 01, 2011 (Dow Jones Commodities News via Comtex) --Better-than-expected U.S. manufacturing data added some thrust to copper's rally.

The Institute of Supply Management's manufacturing purchasing managers' index rose to 55.3 in June, from 53.5 in May, bucking a downward global trend and surprising investors.

Traders look at the data as an indicator of future demand as copper's electrical conductivity, rust-resistance and heat-transference properties make it a widely-used raw material in the manufacturing of goods like phones, cars and air-conditioners.

The better-than-expected report spurred investor demand for copper futures, lifting the September-delivery contract by 1.65 cents, or 0.4%, to $4.2990 a pound on the Comex division of the New York Mercantile exchange.

Thinly traded July-delivery copper was recently up 1.15 cents, or 0.3%, at $4.2835 a pound.

Earlier in the day, copper prices had dipped on weak manufacturing data from China. China's official manufacturing Purchasing Managers Index fell for the third consecutive month in June, to a reading of 50.9, from 52.0 in May. A reading below 50 indicates that manufacturing activity is contracting.

Meanwhile, the HSBC Purchasing Managers Index slipped to an 11-month low of 50.1 in June, from 51.6 in May.

China's booming construction and manufacturing sectors have propelled the country to become the world's largest copper consumer, ahead of the U.S.

However, Beijing's efforts to cool inflation through tighter credit measures have had a damping effect on these industries and their demand for copper in recent months.

Traders expect copper futures to have a bumpy ride amid thin trading volumes Friday as many U.S.-based market participants have embarked for their Independence Day holiday celebrations early.

 

copper

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