Copper Rises for First Day in Three on New York Factory Growth

SHANGHAI, Aug. 18 -- Copper climbed for the first day in three after manufacturing in the New York region expanded for the first time in more than a year, reinforcing signs the worst recession since the 1930s is nearing an end.

    The Federal Reserve Bank of New York's general economic index climbed to 12.1, higher than forecast, the bank said yesterday. Readings of more than zero signal expansion. Copper, a barometer of economic growth, slumped 5.2 percent in the past two days on concern a recent rally overshot the pace of recovery.

    The manufacturing data "lent support at a time when the market sentiment is very unstable," analysts led by Guo Yong at Jinrui Futures Co. said in an e-mailed report today.

    Three-month delivery copper climbed as much as 1.8 percent to $6,160 a metric ton on the London Metal Exchange, and traded at $6,120 a ton at 9:47 a.m. in Singapore. The contract jumped to the highest since Oct. 1 last week.

    Copper for November delivery on the Shanghai Futures Exchange added as much as 1.3 percent to 48,400 yuan ($7,082) a ton. The contract last traded at 48,020 yuan.

    China's Shanghai Composite Index plunged 5.8 percent yesterday, the most in nine months, and commodity prices fell. The benchmark stock index may fall a further 10 percent as bank lending slows, according to Andy Xie, a former Morgan Stanley chief Asian economist.

    The decline in the Chinese stock market is one of the "key sentiment drivers" for industrial metals, Na Liu, an analyst at Scotia Capital Inc., wrote in an e-mailed report dated Aug. 17. "The change in sentiment on the Chinese stock market has clearly had an impact on the commodities markets and the raw materials sectors," Liu wrote.

    Among other LME-traded metals, aluminum rose 2 percent to $1,998.75 a ton, lead advanced 1.9 percent to $1,818 a ton, zinc added 1.7 percent to $1,801 a ton, nickel climbed 1.6 percent to $19,400 a ton and tin gained 1.1 percent to $14,058 a ton.

    (Source: Bloomberg)