Sep 21, 2012 (Dow Jones) NEW YORK--Copper futures settled higher Friday on reports that Spain may soon seek financial help from international creditors.
The most-actively traded contract, for December delivery, rose 3 cents, or 0.8%, to settle at $3.7890 a pound on the Comex division of the New York Mercantile Exchange.
Spain has held talks with the European Commission about structural reforms needed to pave the way for a formal sovereign-debt bailout request, according to the Financial Times.
Investors have long worried that the fourth-largest economy in the euro zone will require assistance with its massive debt load.
"This takes a risk out of the market, and any progress with the European debt situation can't help but be a positive driver for commodities," said Bart Melek, senior commodity strategist with TD Securities.
Investors also continued to digest Thursday's data from HSBC which showed China's manufacturing sector contracted for the 11th consecutive month in September.
Copper futures had slumped to a one-week low on the report as investors worried that the world's largest consumer of the industrial metal would reduce its demand.
But some market watchers see the weaker data as raising the likelihood that the world's second-largest economy will soon launch a stimulus program.
"Given the sluggish readings, we would not be surprised to see the government move on both interest rates and reserve requirements over the next several weeks," said Edward Meir, senior commodities strategist with INTL FCStone, in a note to clients.
Copper settlements (ranges include electronic and pit trading):
Sep $3.8035; up 3.10 cents; Range $3.7945-$3.8090
Dec $3.7890; up 3.00 cents; Range $3.7705-$3.8095