SINGAPORE, Nov 1: London copper edged up on Friday as Chinese factory data beat expectations and was eyeing its biggest weekly gain in six, underpinned by growing signs of economic stabilisation in the world’s top metals consumer.
China’s manufacturing sector grew at its fastest pace in 18 months in October, official data showed on Friday, while a private sector report showed brightening new export orders.
‘For metals, it’s most likely ‘steady as she goes’,’ said analyst Joel Crane at Morgan Stanley in Melbourne, adding that global manufacturing is improving at a steady rate – not easing as some had expected – supported by easier policy in China and the United States.
‘It’s likely put a floor under prices but given we’re not getting massive upside (on U.S., China manufacturing growth), I wouldn’t expect prices to significantly increase either on the back of this data.’
Three-month copper on the London Metal Exchange had gained 0.2 percent to $7,265 a tonne by 0245 GMT, after falling about half a percent in the previous session.
Copper prices struck a one-week peak at $7,300 on Thursday, but remain within a $7,000-7,420 band in place since early August.
The most-traded January copper contract on the Shanghai Futures Exchange climbed 0.3 percent to 51,960 yuan ($8,500) a tonne.
Adding to signs of optimism over growth, Business activity in the U.S. Midwest surged past expectations in October as new orders hit their highest level since 2004, countering recent evidence of soft economic growth.
This fuelled the dollar, tempering gains in commodities by making them more expensive for holders of other currencies.
Still, reflecting expectations for robust copper demand next year, Pan Pacific Copper, a unit of JX Holdings Inc, set 2014 copper premiums for Chinese buyers mostly at $123, up 45 percent from this year, a spokesman at the company said on Friday.
In other metals, nickel outperformed in October, gaining more than 4 percent as traders positioned for an export ban by Indonesia to come into place next year.
‘On nickel, it felt like people were putting bets on the Indonesia ban coming in to place. But our view is the ban will not be enforced in its current format, but will likely be watered down,’ said Crane.
Indonesia, the world’s top exporter of nickel ore, has said it plans to bring in a ban on unprocessed ore exports in January 2014.
A potential ban on nickel ore exports by Indonesia next year and production cutbacks could lift the price of this year’s worst-performing base metal by more than 20 percent off multi-year lows, analysts said. (agencies)
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