SG:Copper climbs on Indications of rebounding economy in the US
Copper rose in London, narrowing a second weekly drop before a report on US industrial production projected to add to signs of an economic revival in the world’s second biggest consumer of the metal.
Economists said that output climbed 0.2% in May, the third gain in four. Small businesses in the US were the most optimistic in a year, mortgage applications rebounded from four weeks of declines and retail sales advanced more than forecast.
Mr Marina Stoop an analyst at Credit Suisse Group AG’s private banking unit said that “Today the market focus is likely to shift from commodity specific data back to economic data. US industrial production is due, and a rebound could provide much needed support for metals.”
Prices increased on June 12 as Freeport McMoRan Copper & Gold Inc. declared force majeure on shipments from the world’s second-biggest copper mine, Grasberg in Indonesia, after a deadly accident in May. The shutdown is cutting output by 3 million pounds per day, equal to 2.9% of average daily global production in 2013.
Mr Hwang Il Doo a senior trader at Korea Exchange Bank Futures Company in Seoul said that “The improving US economy indicated demand will increase amid mine supply concern after Freeport’s force majeure on shipments from Grasberg.”
Force majeure is a legal clause freeing companies from contract terms because of circumstances beyond their control. Copper stockpiles monitored by the LME rose 1.6% to 618,075 tonnes capping a second weekly expansion, daily exchange figures showed. Orders to remove the metal from warehouses fell 1.1% to 218,750 tonnes.
