Copper rose the most in three weeks in London after reports showed manufacturing strengthened last month in China, the world’s biggest consumer of the metal.
An official manufacturing gauge reached a 16-month high of 51 and a separate measure from HSBC Holdings Plc and Markit Economics jumped the most in three years to 50.1. Readings above 50 indicate expansion. Prices also climbed after Bank of America Merrill Lynch said inventories of copper held in Chinese bonded warehouses plunged.
“Manufacturing data out of China has proven supportive to base metals,” RBC Capital Markets Ltd. said in a report today.
Copper for delivery in three months gained 2 percent to $7,241 a metric ton by 5:19 p.m. on the London Metal Exchange. Prices rose as much as 2.5 percent, the most since Aug. 8. Copper for delivery in December added 2 percent to $3.2965 a pound on the Comex in New York, where floor trading is closed today for the Labor Day holiday.
Holdings of copper in bonded warehouses, which aren’t officially reported, slid to 350,000 tons from 1.1 million tons about a year ago, Bank of America Merrill Lynch said. Those comments were “supportive,” according to RBC.
Copper stockpiles monitored by the LME rose for a third session to 589,750 tons, daily exchange figures showed. Orders to remove the metal from warehouses were little changed at 284,200 tons.
Money managers reduced their net-long position, or wager on higher copper prices, by 9.1 percent to 13,043 Comex futures and options contracts in the week ended Aug. 27, U.S. Commodity Futures Trading Commission data showed. They stayed bullish for a third week after five straight months of bearish bets.
Expanding Chinese manufacturing may reinforce an outlook that the economy is responding to Premier Li Keqiang’s policies to support growth. JPMorgan Chase & Co. yesterday raised estimates for Chinese economic growth this quarter and next, citing continued strength in infrastructure and real estate as well as a pickup in exports.
Aluminum, lead, tin and zinc gained in London. Nickel fell.