By Ira Iosebashvili
Copper prices rose to their highest level in almost two weeks
Friday, with some market participants attributing the industrial
metal's strength to expectations of more economic stimulus from
China, its largest consumer.
Copper for September delivery, the most actively traded
contract, recently was up 2.4 cents, or 0.8%, to $3.200 a pound on
the Comex division of the New York Mercantile Exchange, its highest
level since Aug. 11.
Prices are up almost 4% 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% 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 honor its pledge of
delivering 7.5% economic growth this year. China launched a
so-called mini-stimulus in April, which has been credited for
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 towards expectations of more economic stimulus," said Eugen
Weinberg, an analyst at Commerzbank.
Copper also has received a boost from a spate of
better-than-expected U.S. economic numbers. U.S. factory activity
hit its highest pace of expansion since April 2010, while
existing-home sales rose for a fourth-straight month, signs that
the recovery here is gaining traction. The U.S. is the world's
second-largest copper consumer.
Write to Ira Iosebashvili at ira.iosebashvili@wsj.com
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