Industrial metals rose for a second day in London, extending the biggest rally in two years, as figures showed manufacturing may swell in top global consumer China.
Chinese manufacturing might expand in October for the first month in four after a preliminary purchasing managers’ index released by HSBC Holdings Plc and Markit Economics today climbed to 51.1 from September’s final reading of 49.9. Metals also gained as Japanese exports increased more than estimated by economists surveyed by Bloomberg News.
“Good data out of China overnight is adding to the positive Monday morning sentiment,” said Ole Hansen, vice president of trading advisory at Saxo Bank A/S in Copenhagen.
Copper for three-month delivery advanced 3.5 percent to $7,398 a metric ton by 11:47 a.m. on the London Metal Exchange. The LME Index of the six main metals traded on the exchange increased 4.7 percent, the most since August 2009, on Oct. 21. Copper for December delivery rose 3.8 percent to $3.345 a pound on the Comex in New York.
European leaders ruled out tapping the European Central Bank’s balance sheet to boost the region’s rescue fund and outlined plans to aid banks, inching toward a revamped strategy to contain the Greece-fueled debt crisis.
“For now, the market believes Europe will pull through,” Hansen said.
Imports of refined copper into China rose 17 percent to 275,499 tons in September from August, customs figures showed today. Shipments were up 14 percent from a year earlier.
LME copper inventories slid 0.8 percent to 444,275 tons, the lowest level since April 8, for a 6.2 percent decline this month. Orders to draw copper from LME warehouses, or canceled warrants, dropped 3.1 percent to 58,425 tons after surging 57 percent in the prior two sessions. Canceled warrants have jumped 82 percent in October on withdrawals in Asia.
“It’s a bullish factor,” said David Thurtell, head of metals research at Citigroup Inc. in Singapore. “Chinese consumers have been running hand-to-mouth for more than a year, waiting for the price pullback, which has finally come.”
Managed-money funds held net-short positions in copper, or wagers on falling prices, totaling 8,294 futures and options contracts as of Oct. 18, compared with 9,489 a week earlier, data from the U.S. Commodity Futures Trading Commission showed.
Aluminum for three-month delivery on the LME rose 2.7 percent to $2,181.50 a ton. Prices for the lightweight metal are close to the cost of production, Aluminum Corp. of China Ltd. President Luo Jianchuan said, according to a statement posted on the company’s website today.
Lead climbed 3 percent to $1,972 a ton and nickel rose 2.1 percent to $19,200 a ton. Tin advanced 1.5 percent to $22,000 a ton and zinc gained 3.5 percent to $1,868 a ton.
Bloomberg.com