SINGAPORE, Sept 6: London copper edged higher on Friday and was on track to post a weekly gain for the first week in three after solid U.S. Data added to the case that a global recovery is gaining steam, although a robust dollar capped gains.
Copper prices are recovering from three-week lows near $7,080 a tonne last week and have traded in a broader $7,000-$7,500 band for the past month, underpinned by a slow revival in the global economy but curbed in the short-term by a stronger dollar and in the medium-term by improving supply.
‘Things are looking better on the demand side – China looks like it is holding up and some better news is coming out of Europe,’ said analyst Matt Fusurelli of AME Group in Sydney.
‘Our Q4 price forecast for copper is $7,050 average, so we are not far off the current price range. The reasons for that are a combination of the improved macro demand outlook and supply,’ he said.
Three-month copper on the London Metal Exchange edged up 0.5 percent to $7,143.75 a tonne by 0306 GMT, reversing losses from the previous session as prices eyed a small weekly gain of more than half a percent, the first advance since mid August.
The most active December contract on the Shanghai Futures Exchange edged up 0.1 percent to 51,740 yuan ($8,500) a tonne.
Chinese data due out next week is expected to confirm that Beijing has prevented a sharp slowdown in its economy, after the government stepped in with policies to encourage investment and strengthen its hand to push through reforms.
China is the world’s top consumer of copper, accounting for around 40 percent of refined demand.
In the United States, solid jobs and service sector data bolstered views the Federal Reserve could start slowing its bond-buying program as soon as this month, but plunging orders for factory goods highlighted uncertainty around the economic outlook.
U.S. Employers likely stepped up hiring in August, potentially paving the way for the Fed to start cutting back bond purchases later this month.
‘In terms of tapering, that’s all priced in,’ Fusarelli added.
In other metals, Indonesia’s only regulated tin exchange said it is fielding calls from potential buyers of the metal after new trading rules forced a top producer to stop shipments last week, but others said they will sit out for now.
A shortfall in supply helped push up LME cash tin to the highest premium in three years at $125 on Wednesday but this moderated to $77 on Thursday’s evaulations
(agencies)
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