LONDON: Copper prices rose on Monday as sentiment was boosted by robust manufacturing data from China and the United States, though gains were limited by a firmer dollar as the market awaits the outcome of the US presidential election.
Benchmark copper on the London Metal Exchange (LME) was up 0.7% at $6,725 a tonne at 1710 GMT.
"China dominates copper demand, economic activity is back to normal, so more stimulus is unlikely. It would be difficult to justify higher prices," said Julius Baer analyst Carsten Menke.
"The US election, depending on who wins, could be positive for sentiment. But it (the United States) consumes less than 10% of the global total; it wouldn't move the needle in terms of demand from infrastructure investment."
Activity in China's factory sector accelerated at the fastest pace in nearly a decade in October as domestic demand surged, adding momentum to an economy that is quickly recovering from the coronavirus crisis.
US manufacturing activity accelerated more than expected in October, with new orders jumping to their highest level in nearly 17 years.
"Copper turned up decisively after the US data," one metals trader said.
A stronger US currency makes dollar-denominated metals more expensive for holders of other currencies, which could subdue demand and prices.
US President Donald Trump is trailing rival Joe Biden in national opinion polls ahead of Tuesday's election.
But the race is seen as close in enough swing states that Trump could still piece together the votes needed to prevail in the state-by-state Electoral College that determines the winner.
Worries about nearby supplies on the LME market have narrowed the discount for cash metal over the three-month contract to its lowest since December 2019.
Behind this concern is a large holding of aluminium warrants and a 30-39% long futures position for November settlement.
Three-month aluminium gained 1.2% to $1,870.5 a tonne.
Zinc rose 0.7% to $2,542, lead slipped 1.1% to $1,799, tin firmed by 0.3% to $17,780 and nickel was down 0.1% at $15,135.-Reuters
Comments
Comments are closed.