Copper hits 1-week high on short-covering, focus on China
London (May 11) Copper prices climbed to a one-week high on Thursday as funds cut bets on lower prices, but the sustainability of these gains will depend on industrial activity and investment data from top consumer China next week.
Benchmark copper on the London Metal Exchange was up 1.6 percent at $5,589 a tonne at 0940 GMT after earlier touching $5,627.50, its highest since May 3.
"The stronger oil price could be a factor," said Capital Economics' chief commodities economist Caroline Bain. "The PMIs and trade data suggested the Chinese economy was weakening, if that is confirmed in the activity data on Monday then negative sentiment could return."
CHINA DEMAND: China accounts for nearly half of global copper consumption estimated at around 23 million tonnes this year.
CHINA PRODUCTION: Industrial output is expected to rise 7.1 percent in April, slowing from 7.6 percent in March when it rose the fastest on a yearly basis since December 2014.
CHINA INVESTMENT: Fixed asset investment probably stayed relatively stable at 9.1 percent in April, from 9.2 percent in March. CRUDE: Oil prices rise after a fall in U.S. inventories and a bigger-than-expected cut in Saudi supplies to Asia help tighten the market. CHINA PMI: Surveys of manufacturers showed activity slowing in April, while trade data showed import growth slowing and export growth halving. TECHNICALS: Copper stalls ahead of resistance around $5,635, the 21-day moving average. Fibonacci support kicks in at $5,410.
CHILE: Workers at BHP Billiton's Cerro Colorado copper mine in Chile will strike for 24 hours in the coming weeks to protest against recent layoffs and the company's general attitude toward miners, the main union said. DISRUPTIONS: "In January, we estimated a disruption allowance of roughly 1 million tonnes," Barclays said in a note. "Only five months into the year, we conservatively estimate that 464,000 of supply has been lost to disruptions, or roughly 44 percent of our allowance."
PHILIPPINES: Extractive industries like mining should be promoted, not curbed, the Philippines' finance minister said, promising investors there would be no more arbitrary suspensions of operations and more transparency in regulation. NICKEL SUPPLY: Prices have been supported this year by worries about supplies of nickel ore from the Philippines, the world's top ore producer.
NICKEL PRICE: Nickel gained 2.2 percent to $9,320 a tonne from an earlier one week-high at $9,385. Traders said nickel was also up on short-covering, but that resistance at the 21-day moving average around $9,650 could cap further gains.
PRICES: Aluminium was up 0.7 percent at $1,878, zinc rose 1.2 percent to $2,632, lead gained 0.6 percent to $2,203 and tin added 0.6 percent to $19,800.
Source: KitcoNews
