Copper price reverses higher on strong Chinese data

Jan 10, 2017 - 2:59 PM GMT
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Comex copper prices rebounded on Tuesday January 10 after the release of positive Chinese manufacturing data, which triggered fresh buying.

Copper for March delivery on the Comex division of the New York Mercantile Exchange gained 6.25 cents or 2.5% to $2.6010 per pound. The contract had declined in each of the three previous sessions.

Gold for February delivery was recently at $1,182.50 per oz, down $2.40 or 0.2%. Trade has ranged from $1,180.20 to $1,187.70 so far today.

In data, the Chinese producer price index (PPI) for December at 5.5% beat the expected 4.6% and was up sharply from November’s reading of 3.3%.

“The base metals are looking more bullish this morning and the strong PPI data in China is no doubt driving that – the metals look well placed to extend higher; the main concern is if and when markets turn risk-off ahead of Donald Trump’s inauguration,” Benjamin Wong of ADM Investor Services said.

There are also concerns about mine supply should workers at Chile’s Escondida, the world’s largest open pit copper mine, strike from January 23. They are demanding a 7% pay rise.

Metals markets are expected to slow over the next few weeks for Chinese New Year and the US presidential inauguration on January 20.

“The recent price weakness looked like profit-taking ahead of the end of the year,” Metal Bulletin analyst William Adams said. “Now that prices have pulled back and with 2017 under way, we would not be surprised if the rally resumes over the next week.”

“But it may then go quiet ahead of the US presidential inauguration until after the Chinese New Year holiday,” he added.

In US data, the NFIB small business index in December at 105.8 was above the forecast of 99.6 and its highest since December 2004. JOLTS job openings and final wholesale inventories are set for release later today.

Turning to European markets, Germany’s DAX stock index and France’s benchmark CAC-40 were up 0.1% and flat respectively, while the dollar was unchanged at 1.0572 against the euro.

In other commodities, West Texas Intermediate light sweet crude oil futures on Nymex rose 0.3% to $52.11 per barrel and Comex silver for March delivery was 0.3% lower at $16.635 per oz.

(Editing by Mark Shaw)