Copper at 3-1/2 month peak as China outlook brightens
MELBOURNE — London copper hit its highest since early March on Monday, supported by a weaker dollar and as an upbeat second quarter for China’s economy brightened demand prospects for metals.
China’s economy grew 6.90% in the second quarter from a year earlier, faster than expected and in line with the first quarter’s growth. Its property sector, a key metals user, also showed underlying demand remained resilient to government curbs.
STILL BULLISH
“I’m still bullish on copper. The property backdrop is still good; China economy and industrial production numbers are still good. Orders are coming through from state grid,” said analyst Dan Morgan at UBS in Sydney.
London Metal Exchange copper had climbed 0.80% to $ 5,970.50 a ton by 0421 GMT, having earlier struck its highest since March 2 at $5,986.50. Prices added to Friday’s near 1% gains.
Shanghai Futures Exchange ( ShFE) copper gained 1.30% to 47,780 yuan ($7,053) a ton. ShFE nickel jumped 4% following increased demand from China’s steel sector, where prices have also rallied.
China churned out record amounts of steel and aluminum in June as producers rushed to cash-in on rallying prices in the wake of a drive by Beijing to crack down on output of low- grade metal.
US consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation and soft domestic demand that diminished prospects of a third interest rate increase from the Federal Reserve this year.
Hedge funds and money managers cut their net long position in COMEX gold in the week to July 11, as they reduced their net long position in copper futures and options, according to data the US Commodity Futures Trading Commission released on Friday last week.
Asian stocks hit a two-year high on Monday, boosted by stronger- than- expected economic growth in China and bets that lackluster US data will keep the Federal Reserve cautious about the pace of policy tightening.
US Fed Chair Janet Yellen delivers her second day of semiannual monetary policy testimony before the Senate Banking Committee. —