Copper rebounded after slumping by the most in 12 weeks as China’s manufacturing expanded more than estimated, helping revive the demand outlook for the industrial metal in the world’s biggest user.
The contract for delivery in three months on the London Metal Exchange rose as much as 0.6 percent to $7,211.75 a metric ton and was at $7,189.50 at 2:37 p.m. in Shanghai. Prices fell as much as 2.2 percent yesterday, the biggest drop since July 30, on concern that China may tighten credit. Copper has lost 9.3 percent this year.
The Purchasing Managers’ Index climbed to 50.9 this month, according to a preliminary reading released today by HSBC Holdings Plc and Markit Economics. That compares with a 50.4 median forecast from a Bloomberg News survey and September’s 50.2. Levels above 50 signal expansion. Economic growth accelerated for the first time in three quarters last quarter and factory output grew 10.2 percent last month.
“Manufacturing in China hasn’t been that bad, with the index staying above 50,” said Hwang Il Doo, a senior metals trader at Seoul-based Korea Exchange Bank Futures Co. “Still, it remains to be seen whether China will actually tighten its policies.”
Futures for delivery in December were little changed at $3.2690 a pound on the Comex in New York. Copper for delivery in January on the Shanghai Futures Exchange fell 0.9 percent to 51,640 yuan ($8,490) a ton.
On the LME, aluminum and tin rose, while nickel fell. Zinc and lead were little changed.