SINGAPORE, Mar 6: London copper inched up on Wednesday as risk appetites revived, with encouraging U.S. economic data and continued loose monetary policy from key central banks helping drive Wall Street to a record close.
But traders in Asia said that copper consumers, still ramping up after last month’s lunar new year, were not buying at higher prices and questioned the sustainability of copper’s bounce from three month lows hit last week.
Three-month copper on the London Metal Exchange had climbed 0.11 percent to $7,780.50 a tonne by 0331 GMT, adding to small gains in the previous session.
Prices have rebounded 1.7 percent from $7,652 a tonne, its lowest since 19 November, hit on Friday, but copper is still down nearly two percent for the year.
The most-traded June copper contract on the Shanghai Futures Exchange traded little changed at 56,800 yuan ($9,100).
‘Compared to the new year period, demand has improved a little, but we can’t say it’s stronger yet,’ said Chunlan Li, a Beijing-based analyst with metals consultancy CRU.
Prices might have to fall a little more before spot demand emerges and the market finds a bottom, she added.
Asian shares extended gains on Wednesday, following Wall Street’s record close after data showed the U.S. Services sector grew in February at its fastest pace in a year.
China’s pledge to boost government spending to achieve 7.5 percent growth this year also raised investors’ hopes the economy there may help support activity in Europe and the United States.
More policies aimed at promoting growth in the world’s top metals consumer were helping to support metals on Wednesday.
Urbanisation would be the biggest driver of domestic activity in the years ahead, a government official said, and guidelines for China’s planned expansion in this area would be launched during the first half of 2013.
‘Technically the market has found support just under $7650 and over-riding this is a sense that there is latent pent-up Chinese buying around which will probably prove supportive without being overly bullish until we see fresh stimuli,’ London-based broker Sucden said in a note.
In the U.S., Congress is also moving rapidly to pass legislation funding the federal government through Sept. 30, as Senate leaders on Tuesday expressed eagerness to avoid any threat of agency shutdowns when money runs out on March 27.
(AGENCIES)
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