Copper, Aluminum Climb on Optimism Global Recession Is Easing

Posted by tjdetai on August 6th, 2015

Copper and aluminum futures advanced in Shanghai on investors’ optimism that the global recession is easing, while the risk of inflation may be increasing. Copper headed for a third weekly gain and aluminum jumped to the highest since Nov. 20. Demand for aluminum in China, the world’s largest metal consumer, is rising within the auto and construction industries and as smelters may be restocking, an executive from a Chinese unit of Alcoa Inc. said on June 3. “The global economy has shown signs of recovering, which helps in copper’s case,” Wu Tianmin, an analyst at BOC International (China) Ltd., said today. “Also inflation concerns are underpinning the commodities market long-term.” September-delivery copper on the Shanghai Futures Exchange jumped as much as 4.2 percent to 41,260 yuan (,037) a metric ton, the highest since Oct. 15, before closing at 41,180 yuan.

Aluminum gained as much as 4.9 percent to 13,630 yuan, and closed at 13,425 yuan. Nenad Pavic, manager of the materials department at Alcoa (China) Investment Company Ltd., said this week that there were “signs” that Chinese aluminum smelters were restarting some of their idled capacity. Manufacturing in China, the world’s largest copper user, expanded for a third month in May. A surge in lending and investment and rising retail sales have spurred confidence that Premier Wen Jiabao’s 4 trillion yuan stimulus package is reviving growth in the world’s third-biggest economy. China’s vehicle sales rose 9.4 percent to 3.83 million in the first four months of the year, overtaking the U.S. as the world’s largest car market, according to data last month from the China Association of Automobile Manufacturers. U.S. Jobs Initial U.S. jobless claims fell by 4,000 to 621,000 in the week ended May 30, in line with forecasts, according to government data yesterday. The drop signaled the most acute phase of job losses may be over, analysts said. The government will issue May employment data today.

Employers probably cut 520,000 U.S. jobs last month, the median of 76 estimates in a Bloomberg News survey. “We’re on the cusp of a recovery in the U.S. economy,” Ellen Zentner, a Bank of Tokyo-Mitsubishi UFJ Ltd. senior economist in New York, said in a Bloomberg Television interview. The U.S. is the world’s second-largest copper user after China. On the London Metal Exchange, three-month copper headed for a third weekly gain after advancing about 6 percent since May 29. It added 1.4 percent to ,096 a ton by 3:16 p.m. in Beijing. Among other LME metals for three-month delivery, aluminum added 1.7 percent to ,591 a ton and lead was down 0.4 percent at ,660 a ton. Zinc gained 0.3 percent to ,580 a ton and nickel was little changed at ,725 a ton. Tin was up 0.7 percent to trade at ,800 at 3:05 p.m. in Beijing. Still, “some warehouses in Asia expressed interest to register with the London Metal Exchange recently,” said Stafan Graber, an analyst at the Credit Suisse, in a report sent today. “This could lead to one-off inventory increases once it materializes.”

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