Copper climbed to its highest in 10 days and zinc hit a near three-year peak after better-than-expected Chinese factory data calmed fears about economic growth in the world's biggest metals consumer.
News that China's factory sector grew at the fastest clip in 18 months in July prompted investors to shrug off news that Indonesia may soon resume copper concentrate exports that could smooth out kinks in supply.
"This is a good number and the market reaction is saying that the worst is over of the slowdown and we're not headed for a hard landing," said Stephen Briggs, metals strategist at BNP Paribas in London.
China accounts for about 40 percent of global copper demand, but slowing growth in manufacturing and property has dragged on the demand outlook for the metal while a surplus is expected to seep into the market in the second half of the year.
Three-month copperwas the top gainer on the London Metal Exchange, climbing as high as $7,166.50 a tonne, its loftiest since July 14.
It failed to trade in official midday open outcry activity and was last bid up 1.3 percent at $7,140 after closing little changed in previous session.
The most-traded copper contract on the Shanghai Futures Exchangeclosed up 1.5 percent at 50,650 yuan ($8,200).
"Copper is particularly exposed to the property sector in China, which has been the worry area, and copper has clearly underperformed the sector over the past few weeks so it was more due an upside correction," Briggs said.
The market also absorbed more upbeat news from the euro zone, where surveys showed the private sector expanded at the fastest rate in three months in July.
There was also support from production issues at the world's biggest copper producer, Codelco, which admitted for the first time that its newest mine was behind schedule because of problems with its roaster.
But investors shrugged off a looming resumption in concentrate shipments from miners in major exporter Indonesia.
"Consensus was that they would probably resume exports this year. There just wasn't a lot of clarity over when," said analyst Joel Crane of Morgan Stanley in Melbourne.
A senior Indonesian official told Reuters that Jakarta will revise its rules on mineral export taxes next month, paving the way for the country's multi-billion dollar mining industry to resume full production. Freeport-McMoRansaid it was close to signing a deal to resume exports.
ALUMINIUM, ZINC
LME zincedged to a fourth consecutive near three-year top of $2,394 a tonne, before slightly paring gains in official rings to $2,390, a rise of 1.1 percent.
Aluminiumfailed to trade in official rings and was last bid up 1.0 percent at $2,035.50 a tonne, recovering some losses from Wednesday when it shed 1.3 percent.
The metal had gained about 10 percent since the start of the month until touching a near 17-month peak on Tuesday, as investors expected a deficit to hit the market after several years of surpluses.
But Paul Adkins of Beijing-based consultancy AZ China said the high prices were vulnerable since they were spurring Chinese smelters to restart production that had been closed.
"We still doubt the price surge phenomenon will be sustained, since most restarting plants are being backed by government subsidies. And overall, we are still concerned that fundamental demand drivers are not backing the current surge," he told the Reuters Global Base Metals Forum.
"Over-supply is still a concern, with more than 1 million tonnes due into the (Chinese) market by year-end."
Tinedged up 0.2 percent to $22,275 a tonne in official trading and lead climbed 0.9 percent to $2,227. Nickel failed to trade in official rings and was bid at $19,150, up 0.5 percent.
Reuters
News that China's factory sector grew at the fastest clip in 18 months in July prompted investors to shrug off news that Indonesia may soon resume copper concentrate exports that could smooth out kinks in supply.
"This is a good number and the market reaction is saying that the worst is over of the slowdown and we're not headed for a hard landing," said Stephen Briggs, metals strategist at BNP Paribas in London.
China accounts for about 40 percent of global copper demand, but slowing growth in manufacturing and property has dragged on the demand outlook for the metal while a surplus is expected to seep into the market in the second half of the year.
Three-month copper
It failed to trade in official midday open outcry activity and was last bid up 1.3 percent at $7,140 after closing little changed in previous session.
The most-traded copper contract on the Shanghai Futures Exchange
"Copper is particularly exposed to the property sector in China, which has been the worry area, and copper has clearly underperformed the sector over the past few weeks so it was more due an upside correction," Briggs said.
The market also absorbed more upbeat news from the euro zone, where surveys showed the private sector expanded at the fastest rate in three months in July.
There was also support from production issues at the world's biggest copper producer, Codelco, which admitted for the first time that its newest mine was behind schedule because of problems with its roaster.
But investors shrugged off a looming resumption in concentrate shipments from miners in major exporter Indonesia.
"Consensus was that they would probably resume exports this year. There just wasn't a lot of clarity over when," said analyst Joel Crane of Morgan Stanley in Melbourne.
A senior Indonesian official told Reuters that Jakarta will revise its rules on mineral export taxes next month, paving the way for the country's multi-billion dollar mining industry to resume full production. Freeport-McMoRan
ALUMINIUM, ZINC
LME zinc
Aluminium
The metal had gained about 10 percent since the start of the month until touching a near 17-month peak on Tuesday, as investors expected a deficit to hit the market after several years of surpluses.
But Paul Adkins of Beijing-based consultancy AZ China said the high prices were vulnerable since they were spurring Chinese smelters to restart production that had been closed.
"We still doubt the price surge phenomenon will be sustained, since most restarting plants are being backed by government subsidies. And overall, we are still concerned that fundamental demand drivers are not backing the current surge," he told the Reuters Global Base Metals Forum.
"Over-supply is still a concern, with more than 1 million tonnes due into the (Chinese) market by year-end."
Tin
