London copper stays steady as China factory growth picks up

London copper was underpinned on Tuesday by expectations of stronger demand for the metal after China, the world’s biggest copper user, reported better- than- forecast industrial output data and fixedasset investment figures.

China’s factory output rose 6.3 percent in January and February from the same period a year earlier, the country’s National Bureau of Statistics reported on Tuesday. Production was estimated to grow 6.2 percent. Fixed- asset investment grew 8.9 percent, also beating expectations.

China accounts for just under half of global copper demand. Improvement in manufacturing fed a brighter outlook for prices as several disruptions at copper mines have constrained the outlook for supply.

“Supply side issues should continue to support metal prices; however investors are likely to remain cautious leading into the FOMC meeting and other key economic releases,” said ANZ in a report.

Three- month copper on the London Metal Exchange was flat at $ 5,798 a ton by 3: 01 pm Beijing time, adding to the 1.1 percent gain during the previous session. Copper last week fell to a two- month low at $ 5,652 a ton on signs that mine disruptions may be abating.

Volumes were very low however with a turnover of less than 2,000 lots in the benchmark contract, suggesting caution ahead of a meeting of the US Federal Reserve that is expected to result in an interest rate increase on Wednesday.

Shanghai Futures Exchange copper rose 0.7 percent to 47,360 yuan ($ 6,844) a ton.

A strike at Peru’s largest copper mine, Freeport- McMoRan Inc’s Cerro Verde, stretched into its fourth day after a meeting between the union and management failed to resolve a dispute over worker demands, a official from the union said on Monday.

Meanwhile, BHP Billiton on Monday invited striking workers at its Escondida copper mine in Chile, the world’s largest, to return to the negotiating table, after they rejected a similar approach on Saturday.