Advances for copper futures during the first trading session of February helped drive the reddish metal toward its biggest weekly gain in four months, according to Bloomberg.
The base metal’s good fortune as of late is largely linked with strong economic data released by the two nations that are its top users. Copper – due to its myriad uses in construction, manufacturing and additional industrial purposes – has a tendency to be sensitive to economic and financial developments throughout the world.
Manufacturing in China, the globe’s top consumer of the reddish metal – accounting for roughly 40 percent of the world’s demand, developed for a fourth consecutive month in January, according to a purchasing managers’ index released by the Asian nation’s statistics bureau and its logistics federation.
Economists polled by the news service said hiring in January in the U.S., the globe’s largest economy, picked up the most since August.
“The Chinese economy is continuing to recover all the same, albeit somewhat less dynamically than anticipated,” states a Friday report penned by analyst Daniel Briesemann with Commerzbank AG in Frankfurt, according to Bloomberg. “Market players are also likely to be looking with interest at the U.S. labor-market figures.”
At 12:38 p.m. on Friday, copper futures increased 1.34 percent, a 0.005 cent rise to $3.7815 per pound.
The base metal has gained 2.2 percent thus far this week, Bloomberg reports.
A poll administered by the news service indicated 25 analysts forecast prices of the reddish metal to continue with their upward drive next week.
Only five of the analysts in the poll said the base metal will lose value, which establishes the poll’s highest rate since the middle of October 2011.
Economists also noted that economic data due to be released on Monday is set to demonstrate that factory orders increased in the U.S. in December, representing the metric’s third gain during the past four months.
Copper inventories followed by the London Metal Exchange increased more than 1 percent to amount to 376,000 tons, the news source reports. That represents the top amount since the middle of December 2011.
New Orleans, the globe’s largest repository for the base metal, saw increases for a fourth session amounting to 103,550 tons.
“Market players have been ignoring the increase in stocks,” according to the Commerzbank analyst. “This is clearly being overshadowed by the positive economic outlook and growing risks to supply.”
Global growth chimes in
Reuters reports gains for copper futures were linked with an uplifting outlook for the pace of global growth.
In Europe, as the region continues recovering from challenges caused by the sovereign debt crisis during the past three-plus years, consumer confidence and spending have climbed.
Regional factories demonstrated their most productive month in January in nearly 12 months, buoyed by production in Germany climbing.
“The impression is that things are improving slowly on the macroeconomic front. The data seems to be moving in the right direction and we have had more positive surprises than negative surprises,” analyst Robin Bhar with Societe Generale told Reuters. “The key aspect that people will be watching is whether this translates into real physical demand for metals.”
Production poised to climb
Copper Investing News reports Chile, the globe’s biggest producer of the reddish metal, is anticipating a record amount of production to drive up global supply.
For the first time in about four years, global supply of the reddish metal is set to climb high enough that prices of the reddish metal are poised to drop later this year.
The copper commission of the South American nation said production is forecast to increase 3 percent this year to amount to 5.6 million metric tons.
Cochilco also forecast supplies to amount to 5.75 metric tons in 2014.
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