SG:London copper up on hopes Fed will keep stimulus if data disappoints
Reuters reported that London copper rose and was set to finish the week with small gains on hopes the US Federal Reserve would stand by its stimulus if a key jobs report due later in the day disappoints.
Worries that the Fed could start tapering its bond-buying scheme have kept investors on the edge but expectations of only a slight pick up in job growth last month suggests the world's top economy is still in a rut and in need of the central bank's monetary support.
Ms Alexandra Knight economist of National Australia Bank in Melbourne said that "If the jobs data comes in weaker than expected, it may mean the Fed postpones tapering of its quantitative easing which should weigh on the dollar and support metals. Supply disruptions are also playing a part to help prices. But with a soft demand side in China, prices aren't going to lift dramatically.ā€¯
Three month copper on the London Metal Exchange rose 0.42% to USD 7,365 per tonne by 0244 GMT paring some of the previous session's 1.6% drop. It was headed for a less than 1% weekly gain adding to May's 3.6% advance which was the first monthly rise since January.
The most traded October copper contract on the Shanghai Futures Exchange fell 0.26% to CNY 52,950 per tonne but was set for a slight weekly rise. Copper prices are drawing support from a string of mine and plant shutdowns that are threatening to erode an expected supply surplus this year.
Operations at the world's No.2 copper mine in Indonesia remain shut after a deadly accident last month while India's top copper smelter faces another hurdle in reopening from 2 month shutdown after a local authority lodged an appeal. A major China copper producer has also partially suspended operations for a month after a breakdown.
But prices of the metal in London and Shanghai continue to be in the red for the year down more than 7% amid persistent worries about demand from the top consumer China.
Growth in China investment and factory output probably remained listless in May on soft domestic demand, a Reuters poll showed, heightening risks that the Chinese economy may cool further in the second quarter. China's GDP grew by a smaller than forecast 7.7% in the Q1. China will be closed from June 10th to 12th 2013 for Dragon Boat festival holidays.
