Shanghai Copper Heads for First Weekly Gain in Three on Economy

SHANGHAI, July 17 -- Copper in Shanghai headed for the first weekly gain in three on optimism that the Chinese economy is on track to meet the government’s 8 percent growth target, increasing demand for the metal.

    China's gross domestic product expanded at an annual rate of 7.9 percent in the second quarter, the National Bureau of Statistics said yesterday, as the nation became the first of the major economies to rebound from recession. Industrial output increased 10.7 percent in June from a year earlier, the statistics bureau said. Retail sales climbed 15 percent.

    "The recent releases of economic data all point to the fact that a recovery is underway, which is bullish for the metal," Tian Gangfeng, analyst at Haitong Futures Co., said by phone from Shanghai today.

    Copper for October delivery on the Shanghai Futures Exchange was unchanged at 41,540 yuan ($6,081) a metric ton at 10:13 a.m. local time after reaching as high as 42,290 yesterday, the highest since June 12. The contract has jumped 5.5 percent this week. Three-month delivery copper on the London Metal Exchange was down 0.6 percent at $5,230 a ton.

    China, the world's third-largest economy, posted stronger economic growth after expanding at the slowest pace in almost a decade in the previous three months. The first acceleration in growth in more than two years came after the government implemented a 4 trillion yuan ($585 billion) stimulus plan and prodded banks to lend more. The country is the world's largest copper consumer.

    China is the only one of the 10 biggest economies that is expanding, highlighting the role the nation may play in easing the worst global recession since the Great Depression. The U.S. economy is still shrinking, five months after Congress agreed to President Barack Obama's $787 billion stimulus package.

    Among other LME-traded metals, aluminum was down 0.3 percent at $1,690 a ton and zinc fell 1.2 percent to $1,532 a ton. Lead, nickel and tin hadn't traded by 9:55 a.m. in Singapore.

    (Source: Bloomberg)