Copper Advances as Manufacturing Unexpectedly Expands in China
LONDON (Aug 22) Copper rose in London, heading for the biggest gain in two weeks, after manufacturing unexpectedly expanded in China, the world’s largest consumer of the metal.
A factory index released today by HSBC Holdings Plc and Markit Economics showed a preliminary reading of 50.1 for August, against the median estimate of 48.2 in a Bloomberg News survey of economists. Levels above 50 signal growth. Exports from China rebounded in July and service industries expanded at a faster rate, reports showed this month.
“This is yet another in a series of positive economic data to come out of China of late,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail today. “The Chinese economy would appear to be back on the road to recovery, which should be reflected in robust demand for metals and lend support to prices.”
Copper for delivery in three months added 2 percent to $7,388 a metric ton by 9:29 a.m. on the London Metal Exchange. Prices rose as much as 2.1 percent, the most since Aug. 8. Copper for delivery in December gained 1.8 percent to $3.3715 a pound on the Comex in New York.
The metal “has an attractive medium- and long-term demand and supply outlook,” Kazakhmys Plc, which mines for copper in Kazakhstan, said today in a statement. Still, the company reported a first-half loss after copper prices plunged and scrapped its dividend.
LME copper inventories slid for a 27th session to 565,500 tons, daily exchange data showed. They’re poised to shrink for an eighth consecutive week. Orders to withdraw the metal from warehouses fell for a 12th session in 13 to 294,450 tons.
Aluminum for delivery in three months on the LME climbed 1 percent to $1,916 a ton. The premium that buyers must pay to obtain supplies in the U.S. is at 11 cents a pound, the lowest since January, researcher Harbor Intelligence said yesterday in a report.
Tin rose 0.7 percent to $21,899 a ton. The metal for immediate delivery settled yesterday at a $45-a-ton premium to the three-month contract, the widest backwardation since Nov. 20, 2012.
Lead, nickel and zinc advanced in London.