Copper rose for a third day, pacing a rally in base metals, as expansion in China’s services industries boosted optimism the biggest consumer can sustain an economic rebound this year. Lead jumped to a 16-month high.
Copper for delivery in three months rose as much as 0.5 percent to $8,250 a metric ton on the London Metal Exchange and traded at $8,230 by 4:04 p.m. in Seoul. The price rallied to $8,255 yesterday, the highest since Oct. 18. Futures for delivery in March gained 0.4 percent to $3.749 a pound on the Comex in New York.
China’s services industries grew at the fastest pace in four months in December, data showed today, following a better-than-estimated increase in U.S. factory output. A gauge of the country’s manufacturing showed a third month of expansion on Jan. 1. Metals and stocks rallied yesterday as U.S. lawmakers passed a budget bill, averting automatic tax rises and spending cuts. China and the U.S. are the world’s biggest copper users.
“The service-sector data are adding support to copper prices today,” Hwang Il Doo, a senior metals trader at Seoul-based Korea Exchange Bank Futures Co., said by phone today. “That strengthens the view that China’s economy will recover.”
A gauge of China’s non-manufacturing purchasing managers rose to 56.1 in December from 55.6 in November, the National Bureau of Statistics and the Federation of Logistics and Purchasing said. The Institute for Supply Management’s U.S. factory index rose to 50.7 in December from 49.5 a month earlier, the group said yesterday. Economists in a Bloomberg survey had projected a reading of 50.5.
Copper advanced 4.4 percent on the LME in 2012. Inventories tracked by the exchange declined 14 percent last year, the third straight contraction. The LMEX Index, which tracks the six primary metals on the bourse, yesterday jumped to 3,581.7, the highest since Sept. 14.
Lead surged as much as 2.8 percent to $2,499 a ton, the highest level since September 2011, and zinc advanced as much as 2.2 percent to $2,187.25 a ton, the highest price since January last year. Aluminum and nickel also gained, while tin dropped. Markets in China are closed for a holiday.