BR:London copper eyes biggest weekly gain of year on growth hopes
SYDNEY: London copper was set on Friday to post its largest weekly rise this year after encouraging signs in the US labour market boosted optimism about global growth, while Shanghai copper rose in its first session back from China's week-long break.
The number of Americans filing new claims for unemployment benefits fell more than expected last week, in a boost to the labour market outlook and the broader economy.
The unemployment data comes ahead of a key U.S jobs report for January later in the day that is expected to show economic recovery taking hold, brightening the demand outlook for metals.
"Today copper rebounded after very good jobs data with signs of economic recovery in the United States a major driver of copper prices," said Hong-Kong based analyst Helen Lau, at UOB Kay Hian Ltd.
But given factories in top consumer China aren't expected to get going until mid-February, and economic data distorted by the week-long Lunar New Year break, trade is likely to remain focused on US and European macro conditions, she said. "Copper prices are likely to be choppy and range bound it's still too early to buy on weakness," she said.
Three-month copper on the London Metal Exchange edged up by 0.13 percent to $7,139 a tonne by 0613 GMT from the previous session when it hit a ten-day peak at $7,210 a tonne.
Copper prices were on track for a 1 percent gain this week, paring the year's losses so far to 3 percent. Prompt copper supplies are growing shorter, underpinning LME cash prices that climbed on Thursday to trade $48.50 higher than the benchmark, up from around $15 at the start of January.
That's still below mid-January's 19-month peak of $64.50.
The most-traded April copper contract on the Shanghai Futures Exchange climbed 0.29 percent to 51,030 yuan ($8,400) a tonne.
In other metals, zinc prices were outperforming on expectations of improving demand in Asia and as the physical market remains in short supply.
Three-month zinc on the LME is up 1.7 percent this week at $2,006 a tonne, while cash prices jumped to $3 above the benchmark this week, from $15 below on Jan. 29.
Concerns of slowing growth in China's factories are still keeping a lid on metals prices.
China's services sector grew at its slowest pace in almost 2-1/2 years in January after firms secured a smaller volume of new business, a private survey showed, adding to growing signs of slackening in the broader economy.
