London copper edged higher on Tuesday on expectations of stronger demand for the metal after China, the world’s biggest copper user, reported better-than-forecast industrial output data and fixed-asset investment figures. China’s factory output rose 6.3 percent in January and February from the same period a year earlier, the country’s National Bureau of Statistics reported on Tuesday. Production was estimated to grow 6.2 percent. Fixed-asset investment grew 8.9 percent, also beating expectations.
China accounts for just under half of global copper demand. Improvement in manufacturing fed a brighter outlook for prices as several disruptions at copper mines have constrained the outlook for supply.
“Supply side issues should continue to support metal prices; however investors are likely to remain cautious leading into the FOMC meeting and other key economic releases,” said ANZ in a report.
Three-month copper on the London Metal Exchange climbed 0.3 percent to $5,814 a tonne by 0251 GMT, adding to the 1.1 percent gain during the previous session. Copper last week fell to a two-month low at $5,652 a tonne on signs that mine disruptions may be abating.
Volumes were very low however with less than 1,000 lots turnover in the benchmark contract, suggesting caution ahead of a meeting of the U.S. Federal Reserve that is expected to result in an interest rate rise on Wednesday.
Shanghai Futures Exchange copper rose 0.9 percent to 47,440 yuan ($6,859) a tonne. A strike at Peru’s biggest copper mine, Freeport-McMoRan Inc’s Cerro Verde, stretched into its fourth day after a meeting between the union and management failed to resolve a dispute over labour demands, a union official said on Monday.
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Meanwhile, BHP Billiton on Monday invited striking workers at its Escondida copper mine in Chile, the world’s largest, to return to the negotiating table, after they rejected a similar approach on Saturday.
Escondida’s 2,500-member union has been on strike since Feb. 9 after new contract talks fell apart, and the mine has produced no copper since then.
Among other metals, LME nickel was buoyed by the possibility of a full-scale mining ban in the Philippines, the world’s top exporter of nickel ore. It traded up 0.4 percent at $10,215 a tonne.
Philippine President Rodrigo Duterte on Monday accused some miners of funding efforts to destabilise his government as he talked about a possible plan to impose a ban on mining given the environmental damage producers have caused.