Markets

Copper up as hopes rise for global economy

By Glenys Sim (China Daily)
Updated: 2010-12-31 10:38

SINGAPORE - Copper surged to records in London and New York on speculation the global recovery is gaining pace and as investor concerns about tightening in China eased after manufacturing growth in the world's largest metals user slowed.

Three-month copper on the London Metal Exchange rose as much as 1.6 percent to $9,550 a ton on Thursday, surpassing the previous peak of $9,447 reached on Wednesday. It traded at $9,522 a ton by 3:33 pm on Thursday Singapore time, up 29 percent this year, and poised for a second annual increase.

A report showed on Thursday that manufacturing growth in China, the world's largest metals user, slowed for the first time in five months in December, easing concerns about excessive tightening of monetary policy. Consumer prices will stay at "tolerable" levels, according to investor Mark Mobius.

Related readings:  Chinese PMI at three-month low  Copper price high but spot market trading weak  Copper goes up for second day  Output control planned for nonferrous metals

"The manufacturing data on Thursday may at first be seen as bearish, however given the biggest risk to the market has always been a slowdown in China due to tightening measures, investors are taking it as a bullish signal instead," Wang Pengzhen, an analyst at Zhongda Futures Co, said from Zhejiang. "The data gave investors optimism that the government may ease up on its tightening policy."

March-delivery futures on the Comex in New York gained as much as 1.6 percent to $4.3790 a pound, the highest ever for a most-active contract, before trading at $4.3670, up 30 percent this year. The metal for March-delivery on the Shanghai Futures Exchange added as much as 1.9 percent to 70,850 yuan ($10,723) a ton, the highest price since July 2007, reversing an earlier loss of as much as 1 percent.

"Copper is in a strong, upward trend, and perhaps a strong yuan today is giving a further boost to copper prices," Lin Hui, head of the research department at Orient Securities Futures Co, said by phone from Shanghai.

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