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Copper Climbs on Speculation Fed Will Take Steps to Bolster U.S. Economy
Aug 24,2011 10:20CST
industry news
Source:SMM
Copper rose in New York on speculation the Federal Reserve will act to bolster the economy in the U.S., the world's second-biggest consumer of the metal.

Aug. 23 (Bloomberg) –Copper rose in New York on speculation the Federal Reserve will act to bolster the economy in the U.S., the world's second-biggest consumer of the metal.

The Fed holds its annual symposium this weekend in Jackson Hole, Wyoming. Last year Chairman Ben S. Bernanke hinted that the central bank might embark on a second round of asset purchases. Prices also gained as figures indicated that manufacturing in China, the largest copper user, may contract at a slower pace.

"The important news this week will be obviously Bernanke's speech in Jackson Hole," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "That's what people are waiting for."

Copper for December delivery climbed 5 cents, or 1.3 percent, to $4.025 a pound by 7:54 a.m. on the Comex in New York. Prices increased as much as 1.4 percent, the most in almost a week. Copper for three-month delivery rose 1.8 percent to $8,880 a metric ton on the London Metal Exchange.

The Fed bought $600 billion in Treasuries from November through June in a second stage of so-called quantitative easing, or QE2. The central bank said this month U.S. economic growth was "considerably slower" than anticipated and it's ready to use a range of policy tools to boost the economy.

Factory Gauge
A Chinese manufacturing index released today by HSBC Holdings Plc and Markit Economics showed a preliminary reading for August of 49.8, compared with the final 49.3 for July. The final August figure is due Sept. 1. A level below 50 signals a contraction. The gauge "is close to expansionary territory," Commerzbank AG said in a report.

Imports of scrap and refined copper into China in July rose from the previous month and were above the year-to-date average, customs data showed yesterday. Inbound shipments of refined metal gained for a second month and scrap imports rose to the highest level since December.

"The fact that demand in China is relatively robust is also shown by yesterday's import figures," Commerzbank analyst Daniel Briesemann said in the report.

Aluminum for three-month delivery on the LME added 1.1 percent to $2,361.75 a ton. The lightweight metal for immediate delivery closed at a discount of $36.50 a ton to the three-month contract yesterday after the so-called contango reached $36.65, the widest level since September 2010.

Stockpiles of aluminum alloy tracked by the LME climbed to 131,060 tons, the highest level since at least 1994, on a gain in Gwangyang in South Korea, daily exchange data showed.

Zinc, lead, nickel and tin also rose in London.

 

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