SG:London copper snaps 3 day fall after China data
Reuters reported that London copper futures rose for the first time in four sessions after trade data from top consumer China strengthened hopes for brisker economic growth, suggesting its raw material demand will remain robust.
China's exports jumped 25% in January from a year earlier topping market forecasts for an increase of 17% while imports surged 28.8 percent also ahead of analysts estimate of 23.3%.
Mr Zhang Zhiwei chief China economist at Nomura in Hong Kong said that the sharp rise was partly due to the Lunar New Year effect with the holiday falling in January last year but the numbers are still very strong and shows the economic recovery is on track.
Three month copper on the London Metal Exchange rose 0.4% to USD 8,233.50 per tonne by 0714 GMT after hitting a session high of USD 8,253. If Friday's bounce widens later in the global session copper could erase its modest 0.7% loss for the week so far to post its second straight week of gains.
The metal touched 4 month high of USD 8,346 on Monday but investors ran out of positive leads to push prices higher before the release of the Chinese trade numbers. The caution of the past two days ahead of Lunar New Year is fading and we could see prices rally further today and early next week.
Mr Nick Trevethan senior commodities strategist at Australia and New Zealand Banking Group said that copper could test recent highs and possibly rise towards YSD 8,400.
China which accounts for around 40% of refined copper demand imported 350,958 tonnes of copper in January up almost 3% from December as importers brought forward shipments to avoid delays during next week's Spring Festival holiday.
Mr Trevethan said that along with rising production of copper in the country the latest import data points to improving demand conditions in China. The most traded May copper contract on the Shanghai Futures Exchange closed up 0.2 percent at CNY 59,690 per tonne.
The upbeat China trade numbers boosted other risk assets including oil with Brent crude hitting near 5 month highs at close to USD 118 per barrel while Asian shares also rose.
