Copper set to post biggest weekly gain since September

Copper prices were near their highest level in more than four months on Friday, set to post their biggest weekly rise in more than nine months, as US jobs data boosted the demand outlook for industrial metals. Benchmark London Metal Exchange (LME) copper rose to a session high of $7,190 per tonne, its highest since February 19, and was set for a 3 percent gain for the week, the biggest weekly gain since September 20.
It slipped 0.3 percent to $7,152 a tonne in official rings. Confidence was boosted after data showed US employment growth jumped in June and the unemployment rate declined, allaying fears about the economy's health after a weather-hit start to the year. That came after a survey showed that global business activity picked up in June, with new orders pouring in at their fastest rate in over three years.
Some analysts expected the metal used in power and construction could tick lower following its recent gains. "As index buying slows and producer selling emerges, a pull back is due," said Gianclaudio Torlizzi, partner at T-Commodity. "A test of 6,900 will be pivotal (for copper) and if it holds we might see a new top at 7,400-7,500 in August." Copper stocks in LME warehouses have ticked up in the past few sessions, but still remain close to six-year lows near 150,000 tonnes.
Operations at some of Chile's largest copper mines were affected for a few hours by a power outage in the mineral-rich north, industry sources said on Thursday, though the actual impact on production could not be quantified. Aluminium stocks fell by 9,100 tonnes to 5,049,225 tonnes. Benchmark aluminium slipped 0.6 percent to $1,925 per tonne in official rings, after hitting a 10-month high in the previous session. "LME aluminium stocks have been reduced by 5.6 percent... since the end of April, putting them close to their lowest level since October 2012. Nonetheless, we believe that this justifies neither the increase in the LME aluminium price nor the sharp rise in premiums," Commerzbank analysts said in a note.
"The key role here is played by financial transactions which remain attractive in view of the low interest rates and pronounced contango of the forward curve." Zinc traded almost flat at $2,240, and tin traded at $22,825, down 0.3 percent. Nickel, untraded in official rings, was bid at $19,450, down 2 percent and lead was bid at $2,185, down 0.5 percent.