Shanghai Copper Jumps for Third Day on Dollar, Manufacturing

SHANGHAI, June 2 -- Copper futures in Shanghai rose to the highest in more than six weeks as demand increased after the dollar weakened and manufacturing expanded in China, the biggest user of the metal.

    China's official Purchasing Managers' Index was 53.1 in May, the third straight reading of more than 50, which indicates expansion, the Federation of Logistics and Purchasing said yesterday in Beijing. The U.S. Dollar Index extended two weeks of decline to reach its lowest level this year yesterday, boosting the appeal of commodities as a hedge against inflation.

    “We've seen increasing investment interest in copper in China and investors who prefer the metal continued to like it as a hedge against inflation,” Tian Gangfeng, analyst at Haitong Futures Co., said by phone from Shanghai today.

    September-delivery copper on the Shanghai Futures Exchange rose as much as 3.5 percent to 40,590 yuan ($5,943) a ton and paused at 40,330 yuan at the 11:30 a.m. break. The contract has gained 8.4 percent in the two sessions after the Dragon Boat Festival holiday on May 28 and May 29.

    Three-month delivery copper on the London Metal Exchange gained 1.1 percent to $5,130 a ton after rising to a seven-month high at $5,091 a ton yesterday.

    The Standard & Poor's GSCI Index, a basket of 24 commodity futures, climbed as much as 3.5 percent yesterday. The Reuters/Jefferies CRB Index of 19 raw materials surged 14 percent in May, the biggest monthly gain since July 1974, on signs of an improving economic outlook.

    Copper for July delivery rose 1.1 percent to $2.3435 a pound on the New York Mercantile Exchange's Comex division, after gaining to the highest for a most-active contract since Oct. 15.

    Among other metals traded in London, nickel dropped 0.3 percent to $14,600 a ton. Aluminum rose 1 percent to $1,489 a ton. Tin dropped 1 percent to $14,500 a ton and lead fell 0.6 percent to $1,650 a ton. Zinc fell 1 percent to $1,594 a ton.

    (Source: Bloomberg)