Thursday, 03 January 2013 17:14
LONDON: Copper rose for a second session to near 2-1/2 month highs on Thursday, on continued relief over a last-minute deal in the United States to avert a "fiscal cliff" of tax hikes and spending cuts, and upbeat data from top copper consumer China.
Benchmark copper on the London Metal Exchange rose to $8,240.50 a tonne at 1016 GMT, from a close $8,210 a tonne on Wednesday when it posted its biggest daily gain in more than three months on news that U.S lawmakers had reached a budget deal.
The metal used in power and construction hit an intraday high of $8,256.50 a tonne on Thursday, its highest since mid October.
With the fiscal cliff deal reached, President Barack Obama and congressional Republicans now face even bigger budget battles in the next two months on spending cuts and an increase in the nation's limit on borrowing, after a hard-fought deal narrowly averted devastating tax increases and spending cuts.
"With the uncertainty out of the way after the fiscal cliff resolution, as far as markets are concerned the focus is now on the huge budget gap that there is to cope with," said Andrey Kryuchenkov, analyst at VTB.
"And attention is also back on the economic outlook for China, which has shown some promising signs in the last few months with some decent numbers."
Also helping prices push higher was data that showed growth in China's services sector accelerated in December at its fastest pace in four months, adding to signs of a modest year-end revival in the world's second-largest economy.
"Non-manufacturing PMI showed a bigger than expected rise, providing yet more evidence that the turnaround of the Chinese economy is gaining pace with stronger economic growth likely in the months ahead," ETX Capital's Markus Huber said.
Copper rose by more than 4 percent in 2012, following a 21 percent fall in 2011.
Tin was the outstanding winner of the base metals complex last year, rising almost 22 percent, while lead rose by 15 percent, zinc by 13 percent and aluminium by 3 percent.
Center>Copyright Reuters, 2013