Hong Kong: Copper rose to a 20-month high in trading before Good Friday on speculation that manufacturing gains in China and the US, the world's largest users, will boost demand.
A gauge of factory activity in China climbed for the first time in two months, a sign of accelerating growth, according to government data released yesterday in Hong Kong. In the US, manufacturing expanded last month at the fastest pace since July 2004, showing "very strong" momentum heading into the second quarter, according to the Institute for Supply Management.
Chinese factor
Copper's gains are "coming from China, basically, because their economy is continuing to be strong," said Lannie Cohen, the president of Capitol Commodity Services Inc in Indianapolis. China "is fuelling it, along with a bullish chart pattern and our recovery as well," he said.
In other markets on Thursday, crude oil surged to a 17-month high and cocoa climbed to the highest price in five weeks. The UBS Bloomberg Constant Maturity Commodity Index rose 1.3 per cent to 1,307.
Copper futures for May delivery rose 3.05 cents, or 0.9 per cent, to $3.584 a pound on the Comex in New York, up 5.3 per cent for the week. There's was no trading yesterday because of a holiday. Earlier, the price touched $3.606, the highest for a most-active contract since August 1, 2008. Record copper imports by China in the first half of 2009 helped prices to more than double for the year.
Copper also was supported by rising US equities and a declining dollar, which boosted the appeal of commodities as an alternative investment, Cohen said. The Standard & Poor's 500 Index climbed as much as 1 per cent, while the six-currency US Dollar Index fell 0.5 per cent.
In China, the Purchasing Managers' Index advanced to a seasonally adjusted 55.1 last month from 52 in February, according to government data. A reading above 50 indicates expansion. In the US, a similar factory gauge rose to 59.6 last month, topping forecasts. Manufacturing also expanded in India and Europe.
Crude oil rose on signs that global economic growth is accelerating, bolstering optimism that fuel consumption will increase this year.
Oil advanced above $84 after reports showed US, Chinese and European manufacturing expanded, while pessimism decreased among Japan's largest industrial companies.
Perception changed
"The economic news recently has generally been good, which has changed the perception of the oil market," said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. "An economic recovery is always good for demand."
Crude oil for May delivery rose $1.11, or 1.3 per cent, to $84.87 a barrel on the New York Mercantile Exchange, the highest settlement price since October 9, 2008. Prices are 75 per cent higher than a year ago.
Cocoa futures advanced on signs of reduced shipments from Ivory Coast, the world's largest producer.