London: Copper rose on Friday as confidence in the outlook for global growth gathered pace, with investors awaiting a labour market report from the United States for further evidence of the health of the world’s largest economy.
Three month copper on the London Metal Exchange rose to $8,199 a tonne, up 0.4 per cent from a close of $8,165 on Thursday when it touched a 3-1/2 month intraday high at $8,291.25 a tonne.
Sentiment towards risk assets this week was supported by signs that Europe’s banking sector was turning a corner while consumer confidence and spending has grown there and in the United States.
Investors will be looking for fresh signs of a recovery in the pace of economic growth in the United States to be reflected in non-farm payrolls data later in the session.
Economists polled by Reuters expect US job growth to show a modest pick-up in January, supporting views the economy’s sluggish recovery was on track despite a surprise contraction in the final three months of 2012.
In the Eurozone, factories had their best month in nearly a year during January as burgeoning German output offered support amid signs the worst may be over for the troubled currency bloc, a survey showed.
“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,” said Robin Bhar, analyst at Societe Generale.
“The key aspect that people will be watching is whether this translates into real physical demand for metals.”
Copper, used in power and construction, gained nearly 3 per cent in January, and is on track to rise more than 2 per cent this week.
Helping gains was a rise in the euro against the dollar, as a weak dollar makes commodities priced in the US unit cheaper for holders of other currencies.
Keeping gains in check, however, was data showing China’s giant manufacturing sector extended its mild recovery in January with weak foreign demand still crimping growth, underscoring that a rebound from its worst downturn in 13 years remains modest.
Chinese buying of copper has remained subdued ahead of the Lunar New Year holiday. China’s markets will be closed from February 11 to February 15. China accounts for 40 per cent of refined copper consumption.
“Chinese data should get stronger into the second quarter. Global indicators are improving, so it makes sense to a certain extent that speculators are taking another look at copper,” said analyst Bonnie Liu of Macquarie in Singapore.
Sources said Chinese copper smelters could start looking for more raw material concentrate in international spot markets from the second quarter of the year as term shipments drop and a large smelting facility comes back online.
Soldering metal tin was at $24,780 from Thursday’s close of $24,750, while battery material lead rose to $2,438 from $2,431 a tonne.
Aluminium was at $2,091.75 from $2,090 a tonne, stainless-steel ingredient nickel
climbed to $18,420 from $18,350 while zinc, used in galvanizing, was at $2,146.25 from a last bid of $2,145.