Copper Climbs to 26-Month High on China Manufacturing, Weakening Dollar

Copper climbed to a 26-month high, and headed for its third weekly gain, as manufacturing increased in China, the world’s largest user, and a weaker dollar boosted the appeal of commodities as alternative investments. Futures in New York rose to the highest level in five months. 

Copper for three-month delivery on the London Metal Exchange added as much as 0.8 percent to $8,078 a metric ton, the highest level since Aug. 1, 2008, and traded at $8,068 at 9:58 a.m. Singapore time. Futures for December-delivery on the Comex in New York gained as much as 0.8 percent to $3.6790 a pound, the highest price since April. China’s financial markets are closed from today to Oct. 7 for the National Day holiday. 

China’s government-backed purchasing managers’ index rose to 53.8 from 51.7 in August, beating the median forecast of 52.5 in a Bloomberg News survey of 15 economists. A separate PMI released by HSBC Holdings Plc and Markit Economics yesterday rose to a five-month high of 52.9 from 51.9. 

“China’s manufacturing data is positive, but at the moment prices are getting a bit frothy and aren’t backed up by volumes or fundamentals,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “It’s still a dollar story that’s helping commodities move higher.” 

Copper in London is up for a third week, by 1.5 percent, as the dollar weakened on prospects for a further easing of U.S. monetary policy by the Federal Reserve to bolster the economy. The Dollar Index, a six-currency measure of the greenback’s value, is headed for a third weekly drop. 

Aluminum in London was unchanged at $2,351 a ton, zinc gained 0.2 percent to $2,200 a ton, lead dropped 0.4 percent to $2,270 a ton, nickel was little changed at $23,399 a ton and tin hadn’t traded.Source: Bloomberg