SINGAPORE, Sept 11: Copper rose around half a percent on Wednesday, recouping last session’s losses on signs of strength in the Chinese economy and hopes that a U.S. Military strike against Syria will be averted.
Syria accepted a Russian proposal on Tuesday to give up chemical weapons and win a reprieve from U.S. Military strikes which could boost investor appetite for risky assets such as industrial metals.
The gain in copper was capped by rising global inventories and on concerns that the U.S. Federal Reserve might soon start to reduce its monetary stimulus programme, following signals the world’s largest economy is recovering.
‘The crisis in Syria could get resolved relatively quickly. We see the positive economic news coming out of China is lifting copper but it is failing to ignite a rally,’ said Jonathan Barratt, chief executive of Sydney-based commodity research firm Barratt’s Bulletin.
‘The follow through in demand in not there, physical orders are not just there.’
Three-month copper on the London Metal Exchange rose 0.4 percent to $7,198 a tonne by 0259 GMT. The most-traded December copper contract on the Shanghai Futures Exchange gained 0.3 percent to 52,100 yuan a tonne.
Copper has risen more than 8 percent since touching three-year lows in June on mounting evidence that a slowdown in China may be bottoming out.
Data from China this week signalled its economy is improving. China’s exports rose by a forecast-beating 7.2 percent in August from a year earlier.
China’s annual industrial output rose 10.4 percent in August, beating market expectations, while retail sales rose 13.4 percent, official data showed on Tuesday.
China accounts for about 40 percent of global copper consumption.
The copper market is likely to trade in a range amid worries over U.S. Stimulus and rising global stocks, analysts said.
The trend of rising copper stocks is leading investors to fret that the market surplus is widening. The latest LME data showed copper stocks at 588,475 tonnes, up more than 20,000 tonnes from a low of 565,500 tonnes in August.
The beginning of the end of the Federal Reserve’s determined support for the U.S. Economy is expected to come next week when top officials gather for one of the most highly anticipated meetings since the end of the Great Recession. Fed officials will meet on Sept. 17-18. (AGENCIES)
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