The copper market is coming back to life.
The metal surged more than 5 percent on Tuesday on signs of rebounding demand in China, the worlds’ biggest user. That jump pushed prices to close above the 50-day moving average for the first time since May. The breakout could signal that the rally will be sustained. The last time futures made a similar move to rebound above the average was in late February. Copper climbed 7.2 percent over the following two months.
Copper futures for December delivery gained 5.3 percent to settle at $2.434 a pound Tuesday on the Comex in New York. The 50-day moving average is near $2.41.
Prices are recovering after falling to a six-year low last month, with the drop driven by concern that slowing economic growth would crush demand in China. The country’s imports of copper ore and concentrate climbed 19 percent in August from the previous month. The jump showed that “demand hasn’t really died," said Bart Melek, the head of commodity strategy at TD Securities in Toronto.