London copper was underpinned on Friday by expanding factory activity in China that heralded a rosier outlook for demand, soothing nerves after an overnight rout on Wall Street.
China's factory sector posted its strongest growth in 18 months in July as new orders surged to multi-month highs, a private survey showed, adding to signs the economy is regaining momentum helped by a spate of stimulus measures.
"Consumption in China is starting to pick up and inventories are starting to draw down ... I like the look of copper because I think this demand will push us into a deficit sooner than we think," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
Three-month copper on the London Metal Exchangeedged down but by just 0.1 percent to $7,105 a tonne by 0246 GMT, after finishing the prior session little changed. Copper gained for a third month in a row in July, with a 1.4 percent advance.
The most traded October copper contract on the Shanghai Futures Exchangeslipped by 0.2 percent to 50,330 yuan
($8,200) a tonne.
Investors were in no mood to take risks after Argentina, Latin America's No. 3 economy, defaulted on its sovereign debt for the second time in 12 years following the failure of last-ditch talks with holdout creditors. [ID:nL6N0Q64AV]
That triggered a sell-off on Wall Street, adding to pressure from month-end proft-taking.
An improving outlook for the U.S. economy should brighten demand for metals, but at the same time it raises the risk that the Federal Reserve will raise interest rates sooner, which would act as a brake on further gains, Barratt said.
Another worry for markets is cooling growth in China's property sector, which the International Monetary Fund flagged this week.
A number of small developers - the kind that by sheer weight of numbers dominate China's vast property sector - are set to report big drops in earnings or even losses as the industry grapples with tight credit, sluggish sales and excess supply.
In other metals, LME zinc, the top performer in July with a gain of 6.5 percent, eased 0.3 percent to $2,352.50 a tonne.
LME nickellogged the biggest advance at 0.6 percent, paring 2.4 percent losses the session before. It has risen 34 percent this year on prospects of renewed appetite from stainless steel makers amid tight supply after Indonesia banned ore exports in January.
Stainless steel maker Aperambeat profit expectations in the second quarter, saying on Thursday that the market was clearly picking up, with improved conditions in Europe.
China's factory sector posted its strongest growth in 18 months in July as new orders surged to multi-month highs, a private survey showed, adding to signs the economy is regaining momentum helped by a spate of stimulus measures.
"Consumption in China is starting to pick up and inventories are starting to draw down ... I like the look of copper because I think this demand will push us into a deficit sooner than we think," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
Three-month copper on the London Metal Exchange
The most traded October copper contract on the Shanghai Futures Exchange
($8,200) a tonne.
Investors were in no mood to take risks after Argentina, Latin America's No. 3 economy, defaulted on its sovereign debt for the second time in 12 years following the failure of last-ditch talks with holdout creditors. [ID:nL6N0Q64AV]
That triggered a sell-off on Wall Street, adding to pressure from month-end proft-taking.
An improving outlook for the U.S. economy should brighten demand for metals, but at the same time it raises the risk that the Federal Reserve will raise interest rates sooner, which would act as a brake on further gains, Barratt said.
Another worry for markets is cooling growth in China's property sector, which the International Monetary Fund flagged this week.
A number of small developers - the kind that by sheer weight of numbers dominate China's vast property sector - are set to report big drops in earnings or even losses as the industry grapples with tight credit, sluggish sales and excess supply.
In other metals, LME zinc
LME nickel
Stainless steel maker Aperam
