Friday, 14 December 2012 09:38
SINGAPORE: London copper firmed on Friday after data showed China's manufacturers built on a recovery this month, driving a fifth straight week of gains, but a lack of resolution to the US "fiscal cliff" kept a lid on prices.
Growth in China's vast manufacturing sector picked up in December, a preliminary private survey showed, with rises in areas such as new orders and employment underlining a revival in the economy in coming months.
"Going forward, this is all part of another big growth phase - these numbers are good for a reason. Optimism is improving for the first quarter," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm.
China is the world's top copper consumer, accounting for 40 percent of refined demand last year. Hopes are growing for its new leadership to frame policies for new railways and construction, swelling demand for industrial metals.
The country last month approved construction of two city subway projects worth 49 billion yuan ($7.87 billion), adding to a list of railway project approvals aimed at boosting growth in the world's second biggest economy.
Three-month copper on the London Metal Exchange traded at $8,098.00 a tonne by 0249 GMT, off an earlier low of $8,046, down from the previous session's close of $8,074.
Since copper hit a near two-month high at $8,162 a tonne on Wednesday, upside momentum has been curbed by a mix of year-end profit-taking and a stalemate in US talks aimed at averting looming spending cuts and steep tax that threaten to tip the world's top economy back into recession.
Copper prices are up more than six percent this year.
The most-traded March copper contract on the Shanghai Futures Exchange set course for a third consecutive weekly gain, climbing 0.49 percent to 57,890 yuan ($9,300) a tonne.
President Barack Obama and House of Representatives Speaker John Boehner held a "frank" face-to-face meeting on Thursday in an effort to break an impasse in talks to avert the "fiscal cliff".
"You're not going to get a solution that will be a 100 percent, but it may be a third or a quarter. It will be something a bit hard to reduce the deficit, but they'll get a good vote on it which will make it a good rosy story -- the US is not interested in can-kickers any more," Barratt added.
China shares significantly outperformed Asian peers on Friday, after the improved manufacturing data, which was adding support to metals, a Hong Kong-based trader said.
Copyright Reuters, 2012