The price of copper rose to its highest level in nearly two weeks in US futures trade on Friday after moderate US inflation data alleviated worries of higher interest rates and slowing expansion, analysts said.
"The CPI number definitely a little less worrisome," said Eric Whitener, futures analyst with A.G. Edwards, referring to a 0.1 percent rise in the core measure of the Labour Department's Consumer Price Index, which removes food and energy.
Wall Street's median forecast called for an increase of 0.2 percent. The muted price gains reinforced views that the Federal Reserve will not feel pressured to raise interest rates any time soon.
Most-active September copper advanced 3.30 cents to settle at $3.4215 a lb. on the New York Mercantile Exchange's Comex division, its highest close since June 5, after trading a session range between $3.34 and $3.4285.
Given copper's recent upturned, traders were interested to see if the rally can test the $3.48 to $3.50 level next week. "This is the area where we pivoted and reversed about two weeks ago," said one. Copper for July delivery ended up 2.95 cents to $3.4220, while the rest of the board closed with gains ranging from 1.55 to 3.30 cents.
Final estimated futures volumes slowed to 14,390 lots compared with Thursday's official count at 19,147 lots. As of June 14, open interest in Comex copper futures rose 391 lots to 79,067 contracts. A 6 percent rise in Shanghai copper stocks, week-over-week, and a 37 percent drop in Chinese imports from April to May, failed to dampen the bullish sentiment this week as traders turned their attention to the recent breakout of threatening supply constraints.
"If the bulls want to hang their hat on something that is one thing to point towards," Whitener said. In Mexico, a mine union called off a strike threatened at nine Group Mexico properties, including the giant Cananea copper mine, after the government said the stoppage was illegal. Looking at supply-side fundamentals, London Metal Exchange copper warehouse inventories fell by 1,175 tonnes to 117,900 tonnes on Friday, while Comex stocks declined 340 to 24,830 short tons on Thursday.
LME copper for delivery in three months charged to $7,520 a tonne from a session low at $7,335 and ended the day at $7,500, up $35 from Thursday's close.
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