SINGAPORE, Aug 2: London copper edged down on Friday on profit taking, but was heading for the first weekly gain in three, supported by signs of stabilisation in global factory sector growth and the accommodative stance of top central banks.
Factory activity in China, the world’s top metals consumer, was slightly stronger than expected in July, while U.S. manufacturing grew at the fastest clip in two years and European factories snapped a run of declining output, offering tentative support for metals demand.
Still, analysts cautioned against rushing to a conclusion that the world’s second-largest economy had arrested its slowdown.
‘Our Chinese economists have highlighted that order books are still pretty slow and the smaller-sized businesses are still struggling with tight credit conditions,’ said analyst Natalie Rampono of ANZ in Melbourne.
‘Firmer prices are probably due more to a short-covering rally than a change in the fundamental attitude towards China,’ she added.
Three-month copper on the London Metal Exchange slipped by 0.45 percent to $6,966.25 a tonne by 0233 GMT, eroding gains of 1.7 percent from the previous session.
Prices are set to close the week up by more than 1.5 percent, the second-biggest gain since early May.
The most-traded November copper contract on the Shanghai Futures Exchange climbed by 0.46 percent to 50,070 yuan ($8,200) a tonne.
Metals have been underpinned after U.S. Monetary officials this week made no mention of scaling back bond buying and as the European Central Bank affirmed interest rates could fall further from record lows.
Markets are now awaiting July U.S. Jobs figures for further signs of stabilisation in the U.S. Economy.
‘If the non farm payrolls surprises on the upside, we could see a further pick-up in copper prices but I think gains might be limited,’ ANZ’s Rampono added.
High aluminium premiums may not fall despite Goldman Sachs’ olive branch to beleaguered metals customers, but even critics praised the proposal as a smart move to placate regulators and silence complaints.
PRICES
Base metals prices at 0233 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 6966.25 -31.75 -0.45 -12.14
SHFE CU FUT NOV3 50070 230 +0.46 -13.19
HG COPPER SEP3 3.15 -0.01 -0.44 -99.14
LME Alum 1809.00 -3.00 -0.17 -12.65
SHFE AL FUT NOV3 14260 20 +0.14 -7.07
LME Zinc 1853.50 -1.50 -0.08 -10.18
SHFE ZN FUT NOV3 14530 -1015 -6.53 -6.53
LME Nickel 13915.00 20.00 +0.14 -18.89
LME Lead 2101.00 -5.00 -0.24 -10.21
SHFE PB FUT 13955.00 15.00 +0.11 -8.49
LME Tin 20700.00 -220.00 -1.05 -11.54
LME/Shanghai arb^ -327
/
($1 = 6.1305 Chinese yuan)
(AGENCIES)
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