Copper prices rose to their highest in almost three years on Thursday, taking gains in August to 6.6 percent, after an acceleration in Chinese manufacturing boosted the outlook for demand in the world's top metals consumer. Copper was set to gain for a third consecutive month with aluminium, nickel and zinc on track for their biggest monthly increases since September 2012. The Chinese factory data was "just another bullish story to throw into the pool of bullish sentiment that we have for base metals", ING analyst Warren Patterson said.
However, he said prices were moving away from fundamentals as speculative investors poured into metals and disappointing data from China later in the year could provoke sharp falls. Benchmark copper on the London Metal Exchange closed up 0.3 percent at $6,788 a tonne after earlier touching $6,872, the highest since September 2014. China's manufacturing growth unexpectedly accelerated in August, suggesting its economy is expanding strongly despite rising financing costs and a cooling housing market.
The ruling Communist Party will hold a once-every-five-years congress starting on October 18. Second-quarter growth and private-sector employment were strong, while consumer spending disappointed and inflation slowed, suggesting that intereest rate rises may be delayed Benchmark nickel finished up 1.8 percent at $11,800 a tonne and zinc ended 1.6 percent higher at $3,146. Both metals were set for their best months since September 2012, with nickel up 15.4 percent in August and zinc 12.9 percent higher.
Aluminium closed up 1.4 percent at $2,117 after hitting $2,139, the highest since February 2013. It was also set for its strongest month since September 2012, up 10.5 percent. Lead ended 1 percent higher at $2,394 and tin finished up 0.3 percent at $20,670.
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