SINGAPORE, Aug 23: London copper held steady on Friday as promising data from top consumer China continued to underpin, although concerns over a gradual end to U.S. Stimulus muddied the outlook and put prices on track for their first weekly loss in four.
While business surveys show the world economy is on the mend, with U.S. And Chinese manufacturing activity at multi-month highs, they also put investors on tenterhooks as bright data from the United States bolsters the case for the Federal Reserve to row back its asset purchases.
‘People have been getting a bit more optimistic on Chinese growth and demand – China’s official PMIs are probably going to look strong as well,’ said analyst Sijin Cheng at Barclays in Singapore. China’s official PMI is due next week.
‘Still, I would be cautious from here. You do have growth coming back but QE is exiting. That macro development is not going to be very friendly towards commodities, especially if more supply is coming on line,’ she added.
Three-month copper on the London Metal Exchange was at $7,328.25 a tonne by 0220 GMT, up 0.1 percent from the previous session when it rose 1.1 percent.
But prices were set to drop by around 1 percent for the week, their largest weekly loss since late June.
The most-traded December copper contract on the Shanghai Futures Exchange stretched its gains into a third session, rising 0.2 percent to 52,680 yuan ($8,600) a tonne.
Copper prices are set to draw support from demand from China, which according to Europe’s biggest copper producer Aurubis is expected to import more of the metal in coming months as the country’s industrial production recovers and new infrastructure projects start.
Analysts forecast the global copper market will swing into a surplus of around 150,000 tonnes this year, after several years of deficit, mostly due to a flurry of new mine output. That is expected to drag on the metal’s prices.
(AGENCIES)
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