Stronger US Data Lift Comex Copper

Feb 01, 2012 NEW YORK (Dow Jones)--Copper futures ended higher Wednesday as a spate of stronger U.S. economic data fanned investor interest in the growth-sensitive asset.

The most-active contract, for March delivery, settled up 5.20 cents, or 1.4%, at $3.8420 a pound on the Comex division of the New York Mercantile Exchange.

Copper futures extended gains after data showed the U.S. manufacturing sector continued to expand in January. The Institute for Supply Management's manufacturing purchasing managers' index climbed to 54.1 in January, from a revised 53.1 in December. A reading above 50 indicates activity is expanding.

Copper is widely used in manufacturing for its ability to easily conduct electricity and resist rust when exposed to water.

Earlier in the day, copper prices inched higher on data showing U.S. private-sector jobs increased last month. Private businesses added 170,000 jobs in January, according to payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.

Market attention now shifts to the U.S. government's nonfarm payrolls report, due out Friday. Copper traders tend to closely watch jobs data for indications of economic health, as a growing economy tends to require more copper than one that is in recession.

Manufacturing data from China, the world's top consumer of copper, was less encouraging. China's official Purchasing Managers Index, one of two competing reports released Wednesday, rose to 50.5 in January from 50.3 in December, the China Federation of Logistics and Purchasing said.

Meanwhile, the competing HSBC PMI remained in contractionary territory for the third straight month, rising to 48.8 from 48.7 in December. A reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 points to a contraction.

"Chinese real demand for base metals still appears weak and is expected to remain so for [the first quarter of 2012]," Standard Bank metals analyst Marc Ground said in a note to clients.

Copper settlements (ranges include electronic and pit trading):
Mar $3.8420; up 5.20 cents; Range $3.7630-$3.8480
Apr $3.8490; up 5.20 cents; Range $3.7775-$3.8525