Zinc, Lead Rebound From Five-Month Lows on U.S. Factory Data
Zinc and lead climbed from the lowest levels in five months on optimism the U.S. economy is strengthening, boosting demand for industrial metals. Copper was little changed as inventories rose.
The three-month zinc contract rose as much as 0.8 percent to $1,869 a metric ton on the London Metal Exchange by 11:03 a.m. in Tokyo after touching $1,850 yesterday, the lowest price since Nov. 5. Lead rallied 0.6 percent to $2,063 a ton after touching $2,049.85 yesterday, the lowest since Oct. 31.
Orders placed with U.S. factories rose the most in five months in February, boosted by a pickup in demand for motor vehicles and commercial aircraft, a Commerce Department report showed yesterday. The Standard & Poor’s 500 Index reached a record high yesterday as concern over Europe’s debt crisis eased and U.S. factory orders topped forecasts.
“The U.S. factory data helped metals to rebound as they were oversold,” said Hwang Il Doo, a senior trader at Korea Exchange Bank (004940) Futures Co. in Seoul. “Support also came from expectations that the market is bracing for a peak season for demand and funds will flock into metals, with the start of the new quarter.”
Zinc’s 14-day relative strength index, a gauge of whether a commodity is overbought or oversold, has been below the level of 30 on since March 28, indicating a potential impending rebound to some analysts who study technical charts. Lead’s 14-day relative strength index has been below the 30 level since March 26.
On the LME, copper was little changed at $7,471.75 a ton after touching $7,439 yesterday, the lowest price since Aug. 21. Copper futures for May delivery fell 0.2 percent to $3.3735 a pound on the Comex in New York. The contract for July delivery on the Shanghai exchange was little changed at 54,440 yuan ($8,778) a ton.
Copper inventories tracked by the LME climbed 0.2 percent to 571,125 tons. Orders to remove copper from warehouses surged 28 percent to 116,625 tons, the highest since February 2004, on bookings in New Orleans.
Aluminum was also little changed on the LME, while nickel and tin dropped.
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