Copper steadies

Copper steadied on Friday after mixed data showed the pace of manufacturing growth in the United States had increased in June, but that factory activity in top metals consumer China had slowed raising concerns about demand. Three-month copper on the London Metal Exchange closed at $9,435 a tonne, after rallying to its highest in two months on Thursday after Greece rubber-stamped an austerity plan to save the country from bankruptcy. It was at $9,430 a tonne at the close on Thursday.
"It's a mixed bag of signals," said MF global analyst Ed Meir. "The US data is pretty good but it's not much of a surprise and the manufacturing data out of China is probably more important." China's official Purchasing Managers' Index (PMI) for June fell to 50.9 from 52 in May, the China Federation of Logistics and Purchasing said on Friday. This was less than the 51.3 expected by the market.
HSBC's China PMI for June also dipped from 51.6 to 50.1, the lowest in 11 months. The pace of growth in the US manufacturing sector however, picked up for the first time in four months in June, a sign of optimism for the sputtering economy, according to an industry report. Risk appetite was boosted on Thursday after data showed factory activity in the US Midwest accelerated in June, fostering hopes of a pick-up in economic growth.
Although copper looked good on technical charts, fundamentals were not very supportive and may prompt some selling next week, Meir added. A stronger dollar against a basket of currencies was also capping gains. Aluminium, used widely in car-making, could benefit in particular if the final figures are positive. Prices have also taken support from data showing that inventories of the metal in LME warehouses had fallen nearly 16,000 tonnes, the latest data showed.
"We've got an all-time record drawdown in June of combined LME and Shanghai aluminium inventories," said Nick Moore, global head of commodity strategy at RBS Global Banking and Markets. Tin, untraded in rings was bid at $25,650 from $26,050 at Thursday's close, while zinc finished at $2,360 from $2,365. Lead was at $2,674 from $2,684 and aluminium was at $2,503 from $2,532. Nickel was $23,000 from $23,425.