Copper and nickel led a rally in base metals after the House of Representatives approved a bill to avert tax gains for most U.S. workers, boosting the outlook for demand. Lead gained to the highest level in more than 15 months in London and zinc climbed to the most expensive since October.
Copper for delivery in three months climbed as much as 2 percent to $8,090 a metric ton on the London Metal Exchange, equaling the Dec. 18 high, and was at $8,081.75 at 3:58 p.m. in Seoul. Lead rose as much as 1.4 percent to $2,362 a ton, the most expensive since September 2011, and was at $2,361.50.
The 257-167 bipartisan vote in the House breaks a yearlong impasse over how to head off $600 billion in automatic tax rises and spending cuts, which kicked in from Jan. 1. The Senate had passed the bill earlier and it now goes to President Barack Obama, who said he will sign it. The dollar declined and commodities climbed, including crude oil and precious metals.
“Copper is extending gains after the bill was passed,” said Hwang Il Doo, a senior metals trader at Seoul-based Korea Exchange Bank Futures Co. The metal “will be able to keep the momentum for the time being. At the same time, data out of China show the economy is expanding.”
A gauge of China’s manufacturing showed a third month of expansion, adding to evidence that the economic recovery in the top copper consumer will extend into 2013. The Purchasing Managers’ Index was 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. A reading above 50 indicates expansion.
Copper for delivery in March rose as much as 0.9 percent to $3.6835 a pound on the Comex in New York, and was at $3.678. On the LME, zinc climbed as much as 1.5 percent to $2,111.50 a ton, the highest since Oct. 2, and was $2,108, while aluminum, tin and lead gained. Markets in China are closed for a holiday.