LONDON: Copper prices rose on Friday after US job growth accelerated in September to show solid recovery in economy. Three-month copper on the London Metal Exchange (LME) surged to an intraday high of $10,015 following the surprising jump in US non-farm payrolls last month. It was last up 1.2% at $9,984 as at 1330 GMT.
Improved economic data from the United States could support export orders from the world’s manufacturing hub, China, where new orders just slipped to the lowest level in two years.
The market still awaits cues on how China’s stimulus announced earlier this week could transform into meaningful support for metals including grid investments and renewed credit lines for heavy industries.
Traders also eyed opportunities arising from gaps between copper prices across commodity exchanges. LME copper has gained 11.5% in the past month, but still lags a rally at its rival Chicago Mercantile Exchange (Comex). Its most traded front-month copper contract rose 12.9% to $4.551 per lb during the same period.
The Chicago-London copper arbitrage peaked above $200 on Monday and was around $140, brokerage Marex said in a note on Friday.
The gap, if it continues to grow, could prompt more copper shipments to the US in the coming months, a trader source said. Comex copper inventories have already grown 66% since the start of September to 66,610 tonnes.
Meanwhile, the Shanghai Futures Exchange (ShFE), the metals trading platform for the biggest physical market in China, will resume trading next Tuesday. The focus is on how commodity prices will catch up with reactions to stimulus plans.
For other metals, aluminium increased 1.6% to $2,671 and nickel climbed 2% to $17,940. LME zinc advanced 1.7% to $3,175.5, lead was up 0.7% at $2,156.50, while tin was up 0.5% at $33,885.
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