Base metals advanced, paring monthly losses, as better-than-expected U.S. economic data boosted the demand outlook from the second-largest user.
Zinc for delivery in three months gained as much as 0.9 percent to $2,097.50 a metric ton on the London Metal Exchange, before trading at $2,095 at 2:36 p.m. in Shanghai. The metal has lost 2.3 percent this month, the least among the six primary base metals traded on the bourse. Copper rose 0.7 percent to $7,923.50 a ton, while the LME Index declined 4.1 percent this month through yesterday, the most since October.
Orders for U.S. durable goods excluding transportation gear gained in January by the most in a year, while pending home sales increased more than forecast. Federal Reserve Chairman Ben S. Bernanke said yesterday recent increases in some interest rates may signal the U.S. economy is gaining vigor.
“Good data from the U.S. in the last two days prompted some short-covering in metals,” Zhang Tianfeng, an analyst at Dongxing Futures Co., said by phone from Shanghai. “The market focus in China will be on the policy tone set in the National People’s Congress meetings next week, so we may see it provides cues for demand this year.”
The annual session of the congress will start on March 5 to set this year’s growth target and economic policies. The statistics bureau will release the official Purchasing Managers’ Index for February tomorrow, which may climb to 50.5 from 50.4 a month earlier, according to the median in a Bloomberg survey. A number above 50 signals expansion.
Copper for delivery in June on the Shanghai Futures Exchange gained 0.4 percent to 57,730 yuan ($9,278) a ton, and the May contract on the Comex in New York climbed 0.9 percent to $3.599 a pound.