Copper rises after US data, Greek deal boost
Three-month copper on the London Metal Exchange rose nearly 2 percent to $9,127 a tonne at 1338 GMT from Thursday's close of $8,960, snapping two days of losses.
The metal used in power and construction may find its footing this month after three straight months of losses with the price down less than one percent so far in June.
"The overall story is still that people are a little bit uncertain of the way things are going," said analyst Michael Widmer of Bank of America-Merrill Lynch.
"There is still a little bit of anticipation that you may be get a stronger market as you move into the second half, which is to some extent is keeping prices up."
Widmer said that the spate of disappointing data releases in recent weeks have dampened optimism over an economic revival in the United States, pulling down expectations.
"(So) then you might start to see prices come in above expectations, like today, helping (metals) prices," he said.
New orders for long-lasting US manufactured goods rose more than expected in May as bookings for transportation equipment rebounded strongly, according to a government report on Friday that could allay fears of a sharp slowdown in factory activity.
The euro briefly pared losses against the dollar on Friday after the release of better-than-expected US durable goods data, also underpinning metals.
A weaker dollar makes commodities cheaper for holders of other currencies.
In wider markets, risk appetite improved after Greece's deal with international lenders for more money in return for more budget austerity, which also lifted world equities
European Union leaders meeting in Brussels promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts the debt-cutting plan, finalised in fraught last-minute talks with international lenders.
The end of the first half and start of the second next week could add a boost metals prices if investors funnel fresh quarter fund allocations into commodities, traders said
FALLING COPPER STOCKS
Faling copper stocks and a narrowing differential between nearby and further forward prices suggests copper's outlook is already improving, said Barclays Capital in a note.
"Copper's strength in particular is noteworthy given some of the weaker economic data that the market has had to digest recently," said Barclays capital in a note.
"Spreads continue to tighten leading to a steepening of the forward curve ...This reflects the continued improvement in the fundamentals, in our view," it added.
Latest data showed copper inventories fell 325 tonnes to 473,700 tonnes.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 7.5 percent from last Friday, the exchange said on Friday.
Nickel traded at $22,131 from $22,125 a tonne. It has been in a steady downtrend since peaking at just under $29,500 in February, and could come under more pressure as mining companies race to increase production.
International Nickel Indonesia will invest $500 million over the next three or four years to develop a nickel project in Central Sulawesi, the miner's chief executive said on Friday.
Lead traded at $2,583 from $2,549 a tonne while zinc traded at $2,260 from $2,260 a tonne.
Aluminium traded at $2,512.50 from $2,509 a tonne and tin was seen at $25,205 from $25,200 a tonne.
"Some positive spin from the EU summit and a strong run in equities in Asia this morning may well underpin a rebound in the metals," Basemetals.com said in a note.
"However, we still feel the climate is weak overall so see this as an up step within the two steps down one step up pattern
Copyright Reuters, 2011