Copper prices rose to their highest level in almost two weeks Friday, with some market participants attributing the industrial metal’s gains to expectations of more economic stimulus from China, its largest consumer.
Copper for September delivery, the most actively traded contract, climbed 2.85 cents, or 0.9 per cent, at $US3.2045 a pound on the Comex division of the New York Mercantile Exchange, its highest settlement since August 5.
Prices are up more than three per cent in the last three trading sessions after a sharp decline earlier in the month. While the rally was sparked by an optimistic second-half outlook for the copper market from commodity mining and trading company Glencore on Wednesday, it has continued in the face of weaker-than-expected August manufacturing numbers from China, which accounts of 40 per cent of global copper demand.
Some analysts said the metal’s recent strength may stem from expectations that China is prepared to embark on a second round of economic stimulus, as it struggles to honour its pledge of delivering 7.5 per cent economic growth this year.
China launched a so-called mini-stimulus in April, which has been credited with producing a mild economic turnaround after a slow start to the year, but recent data suggest a slowdown in some key sectors of the economy.
“The copper market seems to be looking past the poor Chinese numbers toward expectations of more economic stimulus,” said Eugen Weinberg, an analyst at Commerzbank.