Copper leapfrogged the pivotal $3 a pound level on Wednesday after a key gauge of the Chinese manufacturing sector, the world’s top consumer of the metal, showed new orders jumping to a nine-year high.
Copper for delivery in December trading on the Comex market in New York changed hands for $3.0415 a pound ($6,705 a tonne) in early afternoon trade, up 1.7% from Tuesday’s settlement.
“THE CHINESE ECONOMY IS NOW ENTERING A PERIOD OF ABOVE-TREND GROWTH, WHICH IS INDISPUTABLY GOOD NEWS FOR THE PRICES OF COMMODITIES, PARTICULARLY INDUSTRIAL METALS”
Capital Economics
Wednesday’s move brings gains for 2020 to 9.1% and 57% since the covid-19 lows struck in March. A fortnight ago, the bellwether metal reached the highest price since June 2018.
Domestic and export orders booming
Capital Economics said China’s September PMI readings suggest that “the economy is now entering a period of above-trend growth, which is indisputably good news for the prices of commodities, particularly industrial metals.”
Beijing’s official manufacturing PMI jumped to a more than a two year high of 51.5 (a reading above 50 indicates expansion), up from 51.0 in August, while the survey by Caixin, which gives a clearer picture of activity outside the state-owned sector, came in at 53.
Caixin’s new orders subindex expanded at a rate not seen since early 2011, while new export business expanded at the fastest rate (54.8) since August 2017, which bodes well for a recovery in manufacturing in the rest of the world.
The Wall Street Journal reported a measure from Citigroup that tracks end uses of copper in the country in various sectors, including auto and appliance makers, showing the three-month average reaching its highest level since early in 2017.
Fonte: Mining.com
