LONDON: Copper prices reached their highest since April 7 on Friday as rising Chinese stock markets and strong European manufacturing data prompted investors to bet on higher prices.
A rally in zinc meanwhile faltered but the metal was on track for its biggest weekly gains since November as inventories continued to fall, raising supply fears.
"Chinese PMI figures in a week are important to show whether this recovery is sustainable," said Peter Fertig, a consultant at Quantities Commodity Research.
LME COPPER: London Metal Exchange copper was up 0.9 percent at $5,792.50 a tonne at 1420 GMT after earlier touching a 2-1/2 month high of $5,854.50.
COPPER TECHNICALS: The metal used in power and construction was set for its best week since mid-March and on Friday briefly rose above its 200-day moving average of $5,773. A close above this level could trigger technical buying.
MANUFACTURING PMIs: European manufacturing PMIs beat expectations and climbed to a more than six-year high, but US factory data disappointed.
CHINA: Blue-chip stocks closed at an 18-month high, boosting optimism about the world's largest consumer of industrial metals, after MSCI's decision to include Chinese shares in a key index this week.
DOLLAR: The US currency weakened, supporting dollar-denominated metals by making them cheaper for holders of other currencies.
CHINA IMPORTS: Chinese imports of refined metals fell in May.
LME ZINC: Three-month zinc gave up early gains, falling 0.2 percent to $2,694 a tonne, but was on track for a weekly gain of 6.6 percent, the most in seven months. The metal is trading at three-month highs and fundamentals justified a rise to just under $3,000, said Bank of America Merrill Lynch in a note.
ZINC STOCKS: Cancelled warrants - metal earmarked for delivery - in LME-registered warehouses rose to 73 percent after 22,575 tonnes of new cancellations. Total stocks have fallen by about 30 percent since January to 301,900 tonnes, the lowest since 2009.
ZINC SPECULATORS: Warrant cancellations were focused in LME warehouses in New Orleans, indicating that speculators rather than real demand were responsible, Commerzbank analysts said in a note. "We therefore regard the response of the zinc price as exaggerated," they said.
ZINC TECHNICALS: Zinc has moved above its 100-day and 200-day moving averages this week, stimulating technical buying.
ZINC SPREAD: The discount of cash zinc to three-month metal fell to $0.50 from $19 in mid-June, indicating a reduction in easily available metal.
PRICES: Aluminium was down 0.2 percent at $1,867 a tonne, lead was up 0.2 percent at $2,209.50, tin was 0.4 percent higher at $19,325 and nickel had gained 1.4 percent to $9,150.
Comments
Comments are closed for this article.