1. London copper higher after China factory growth picks up

London copper higher after China factory growth picks up

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.

By: | Melbourne | Published: March 14, 2017 11:20 AM
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. (Reuters)

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.

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