28 Jan, 2013, 06.15AM IST, Bloomberg Copper rallies as Chinese manufacturing boosts confidence

LONDON: Coppertraders are bullish for a third consecutive week as the fastest expansion in Chinese manufacturing in two years boosts confidence that the biggest buyer of the metal is leading a global recovery.

 

 

Eleven analysts surveyed by Bloomberg expect prices to rise next week, six were bearish and a further five were neutral. ETF Securities said $28 million went into its ETFS Physical Copper exchange-traded product last week, the most since its introduction in 2010.

About $5.8 trillion was added to the value of global equities since November as China accelerated for the first time in two years and central banks from the US to Japan pledged more action to bolster growth.

The US is in its best shape for two years, a global poll of Bloomberg subscribers on January 17 showed. China consumes 42% of the world's copper and North America 11%, Barclays estimates.

"Copper is one of those metals that people feel is linked to the industrial cycle," said Carole Ferguson, an analyst at SP Angel Corporate Finance, a broker and adviser in London.

"Demand is obviously returning, we've had good numbers coming out of China and the US definitely looks as if it's in a recovery trend." The metal rose 1.3% to $8,031.50 a tonne on the London Metal Exchange this year, after averaging $7,953 in 2012, the second-highest on record.

It reached a two-month low of $7,506 on November 9. The Standard & Poor's GSCI gauge of 24 commodities added 2.5% this year and the MSCI All-Country World Index of equities gained 4.4%. Treasuries lost 0.4%, a Bank of America Corp index shows.

The preliminary reading of a Purchasing Managers' Index in China was 51.9% this month, compared with 51.5 in December, HSBC Holdings and Markit Economics said on Saturday.