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Zinc adds, Copper Climbs to Highest Level Since April as China Manufacturing Quickens

By Bloomberg News - Aug 31, 2010 8:54 PM PT

Copper Highest Level Since April in London, Shanghai

Copper advanced to the highest level since April in London and Shanghai. Photographer: Chris Rank/Bloomberg

Copper advanced to the highest level since April in London and Shanghai as manufacturing in China, the biggest consumer, expanded at a faster pace in August after the weakest growth since February 2009 the previous month.

Three-month delivery copper gained as much as 2 percent to $7,585 a metric ton, the highest level since April 27, and traded at $7,545 a ton at 11:52 a.m. in Shanghai. Copper for December delivery in Shanghai increased as much as 2.5 percent to 59,880 yuan ($8,789) a ton and traded at 59,600 yuan by the midday break.

The purchasing managers’ index rose to 51.7 from 51.2, exceeding forecasts, a government-backed report showed. Seasonal factors might have had an effect because the index typically gains as factories restart following July maintenance, Mizuho Securities Asia Ltd. said. A separate PMI released by HSBC Holdings Plc and Markit Economics gained to 51.9 from 49.4.

“The PMI data boosted market sentiment, especially the growth in new orders and new export orders,” Peng Qiang, an analyst at Cofco Futures Co., said by phone from Beijing.

Stocks in Asia advanced after the release offered reassurance that China’s moderation in growth isn’t deepening; any steeper slowdown in China would hurt a global recovery already hindered by elevated American unemployment. Signs of faster gains in prices in the report also underscored the need for policy makers to be on guard against inflation.

“I don’t see any substantial improvement in the supply and demand situation that can drive copper prices higher, but Shanghai is technically strong,” Luo Dayun, a trader at China Rising Futures Co., said by phone from Beijing.

U.S. Manufacturing

The U.S. Institute for Supply Management will release the monthly national factory index today, which may drop to 52.8 in August from 55.5 the prior month, according to the median forecast of economists surveyed by Bloomberg.

Demand for base metals in China usually increases in spring and fall, as smelters and manufacturers choose to suspend operations in summer and winter due to extreme temperatures.

Aluminum gained 0.4 percent to $2,067 a ton in London, zinc increased 2.4 percent to $2,114 a ton, and lead climbed 1.1 percent to $2,092 a ton. Nickel advanced 2.2 percent to $21,160 a ton, and tin gained 1.9 percent to $21,395 a ton at 11:37 a.m. in Shanghai.

http://www.bloomberg.com/news/2010-09-01/copper-climbs-to-highest-level-since-april-as-china-manufacturing-quickens.html