SINGAPORE, Aug 13: London copper edged up on Tuesday, trading near two-month highs after upbeat Chinese economic reports shored up confidence over appetite for metals in the world’s No 2 economy.
A brightening picture for trade and factory production in China has fanned hopes that growth in the world’s top metals consumer is stabilising after more than two years of slowing.
The rosier outlook for demand could be underlined later in the session when data is expected to show that recovery is taking root in Europe and the United States.
‘The market was overly bearish on China’s growth prospects a month ago, but in the last few weeks economic indicators have begun to stabilise … Growth is not fantastic, but it is also not falling off a cliff,’ said Thomas Lam chief economist at DMG & Partners Securities in Singapore.
‘There might be some positive push in the near term for copper prices as expectations are readjusted but we can’t expect any strong upside impetus to be sustained.’
Three-month copper on the London Metal Exchange had inched up 0.30 percent to $7,272.75 a tonne by 0351 GMT, partially erasing losses from the previous session.
Copper prices on Monday hit the highest since June 7 at $7,318.50 a tonne, before closing 0.3 percent down on the day.
The most-traded December copper contract on the Shanghai Futures Exchange gained 0.19 percent to 52,210 yuan ($8,500) a tonne.
In the latest bid to bolster the economy, China’s cabinet has unveiled plans to set up more private banks to boost financial support for cash-starved smaller firms.
There was evidence that copper’s step up in prices has softened nearby demand for metal. Premiums for copper in Shanghai have slipped by $10 from Friday to $200, according to China price provider SMM.
A tentative view that the global economy is emerging from its lull could harden into conventional wisdom by the end of this week if, as expected, data shows the euro zone’s lengthy recession has ended.
Another test of the view the US economy is finding its feet will be Tuesday’s retail sales data, which most expect to be strong.
Elsewhere, the US commodities market regulator has subpoenaed a number of major metals warehousing firms, including Switzerland-based commodities giant Glencore, seeking documents and communications from the last three years as an inquiry into complaints about inflated metals prices gathers steam.
(AGENCIES)
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