SINGAPORE, May 8:London copper futures edged higher on Wednesday, trading close to a three-week high as strong Chinese data fuelled hopes that an improvement in the world’s second biggest economy would spur demand.
China’s better-than-expected trade numbers came after German industrial orders showed unexpected strength earlier this week and Friday’s upbeat US monthly nonfarm payrolls.
Investors in the metals market expect copper imports by China, the world’s biggest importer, to rise from May, despite a decline in April purchases, which had been expected.
China’s copper arrivals fell 7.4 percent in April from a month ago to hit a 22-month low, hurt by port strikes in Chile and delays to shipments after the closure of India’s top smelter.
‘Look at the leading indicators, they are turning now,’ said Dominic Schnider, an analyst at UBS Wealth Management. ‘We see a pickup taking place, which makes it interesting to look at the May number.’
Three-month copper on the London Metal Exchange rose 0.2 percent to $7,278 a tonne by 0117 GMT, after touching a high of $7,315 a tonne. The metal rose to a three-week top of $7,374 on Tuesday, boosted by a strong US employment report.
The most-traded September copper contract on the Shanghai Futures Exchange eased 0.2 percent to 52,580 yuan a tonne.
Copper has lost almost 13 percent since hitting $8,346 a tonne in early February. Last month, the metal hit its lowest in a year-and-a-half following weak growth data from China.
But consumption of refined copper by Chinese fabricators, which buy the metal to make semi-finished or finished products, such as rods and tubes, has increased in the past few weeks, which could boost the needs for imports in May.
‘We expect imports to rise gradually from May, as domestic demand rises,’ said Yang Xiaoguang, analyst at Jinrui Futures.
‘Our understanding is that many fabricators have resumed normal production in the past few weeks and the government has brought forward investments in the power sector, from July-August in previous years.’
Some investors remain heartened by a decline in copper stocks in both Shanghai and on the LME.
Shanghai stocks have declined to 213,782 tonnes, their lowest since late February, while LME stocks are at 604,600, their lowest since early April, having hit their highest in nearly a decade in late April.
In other metals, aluminium edged higher to $1882.50 a tonne, while zinc gained 0.4 percent to $1,880.25 a tonne and tin added 0.6 percent to $20,316.
Nickel fell 0.3 percent to $15,152 a tonne.
Russia’s Norilsk Nickel, the world’s largest nickel and palladium miner, said on Tuesday its nickel and platinum group metals output fell in the first quarter 2013, while copper production rose.
Nickel output was 71,573 tonnes in the first quarter, down 6 percent, year-on-year, due to a shortfall in delivery of raw materials to its operations on the Kola peninsula in Russia and its Harjavalta refinery in Finland, it said in a statement. (AGENCIES)
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