Copper rises

Copper bounced back on Thursday as upbeat labour market data from the United States helped ease some fears about the economy, while an appreciation of China's currency also boosted the metal as it suggested the country was confident about growth prospects.
Benchmark copper on the London Metal Exchange ended at $8,881 a tonne, after hitting its lowest close since December at $8,595 on Wednesday. The metal used in power and construction nudged higher after data showed the number of Americans claiming new jobless benefits dropped to a four-month low last week, offering a sliver of hope for an economy that has been battered by a credit rating downgrade and falling share prices.
Despite Thursday's gains, falls from recent days has pushed copper down 1.7 percent so far this week and around 7 percent lower in the year to date, prompting some buying on the view that fundamentals remain strong for the metal. A late recovery in equity markets also helped cement gains for industrial metals, as banking shares stabilised after sharp falls earlier but further volatility was expected as investors remained nervous about the euro zone debt crisis.
China is the world's largest consumer of industrial metals. It accounts for nearly 40 percent of global copper consumption, which is estimated at around 19 million tonnes this year. "A key feature of the Chinese market in recent days has been the appreciation of the yuan, whose strength has noticeably accelerated," Standard Bank said in a note. "This is having and will continue to have a significant impact on arbitrage ratios (LME/Shanghai Futures Exchange) for copper, lead, zinc and aluminium."
Another plus was China's copper imports, which rose 9.5 percent to a six-month high in July as metal purchased during May and June arrived at ports, although it may decline in August. "The stronger yuan is a factor and could mean more Chinese consumers in the market. People were also reassured by China's copper imports," a LME trader said. "But we're waiting to see what happens next." An indication of buying activity is cancelled warrants, or material already tagged for delivery on stocks in LME-approved warehouses.
Total LME copper stocks were at 463,150 tonnes and cancelled warrants at 8,300 tonnes. The percentage at 1.8 percent is the lowest since February 2010. Other industrial metals also gained from the more positive tone overall. Aluminium rose to $2,413 a tonne from $2,396 at the close on Wednesday.
Zinc rose to $2,186 a tonne, from Wednesday's close at $2,100, which is a level some analysts see as offering support to the metal. Lead was at $2,385 a tonne from $2,275, while tin rose to $23,605 from $22,745. Nickel traded at $21,600 from $20,975 on Wednesday.