Copper Rallies as Inventories Drop Amid Signs of Factory Gains
Copper futures rose for the first time in three sessions amid signs that manufacturing is gaining momentum as inventories of the metal continue to shrink.
U.S. factory orders rebounded 1.8 percent in November from a 0.5 percent decline a month earlier that was smaller than initially reported, a government report showed today. The gain exceeded the 1.7 percent estimate of economists surveyed by Bloomberg. Stockpiles monitored by the London Metal Exchange fell for the 43rd straight session, the longest slump since 2004, to an 11-month low.
“Inventories are dropping, and there’s just generally more optimism going into the New Year with some of the economic data we’ve seen,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “As long the economic reports are showing an uptrend, copper traders are going to be OK with that.”
Copper futures for March delivery added 0.1 percent to settle at $3.3595 a pound at 1:14 p.m. on the Comex in New York. The metal fell 0.9 percent last week.
Manufacturing in the U.S. expanded in December at the second-fastest pace in more than two years, a private report showed last week.
Inventories tracked by the London, New York and Shanghai exchanges are the lowest since November 2012.
“With the decreasing warehouse stock levels, there is more nervousness.” Andrew Silver, a broker at Triland Metals Ltd. in London, said in an e-mail.
Copper lost as much as 0.7 percent earlier on concern that signs of a slowing economy may damp demand in China, the world’s biggest consumer.
On the LME, copper for delivery in three months rose 0.1 percent to $7,325 a metric ton ($3.32 a pound). Aluminum, tin and zinc also advanced in London. Lead fell, and nickel dropped to a one-month low.
To contact the reporter on this story: Joe Richter in New York at email@example.com
To contact the editor responsible for this story: Millie Munshi at firstname.lastname@example.org