Copper Rises to Two-Year High as Chinese Manufacturing Quickens

Copper rose to a two-year high in New York after a report showed that manufacturing accelerated in China, the world's biggest consumer of the metal.

Manufacturing expanded at the fastest pace in four months, a report from China's logistics federation and statistics bureau showed. Copper also climbed as the dollar slumped, making metals priced in the currency cheaper in terms of other monies and stoking demand for raw materials as an alternative investment.

"China is viewed as having engineered a gentle moderation in growth," said David Thurtell, an analyst at Citigroup Inc. in London. "Not too hot, not too cold."

Copper for delivery in December added 5.3 cents, or 1.5 percent, to $3.7045 a pound at 8:29 a.m. on the Comex in New York. Prices earlier today touched $3.72, the highest level since July 2008, and headed for a third straight weekly gain.

On the London Metal Exchange, copper for delivery in three months climbed 1.6 percent to $8,141 a metric ton ($3.51 a pound). Tin rose to within 1.6 percent of a record and nickel posted the longest winning streak since 2007.

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 on Sept. 29 by HSBC Holdings Plc and Markit Economics climbed to a five-month high.

Weaker Dollar

The U.S. Dollar Index, a six-currency gauge of the greenback's strength, fell as much as 0.7 percent, on course for a third straight weekly retreat. The gauge slid 8.5 percent in the third quarter, contributing to the 23 percent advance by the LME Index of the six main metals traded on the exchange.

Inventories of copper monitored by the LME fell for a fifth day to 373,800 tons, the lowest level since Nov. 3. Stockpiles shrank for a 32nd week in a row this week. Aluminum inventories today dropped for a 12th straight session to 4.35 million tons, the lowest level since June 25, 2009.

Tin for three-month delivery on the LME added 3.1 percent to $25,000 a ton. Prices touched $25,100, the highest level since May 16, 2008, and $400 below the record achieved that month. The metal has jumped 47 percent this year, leading gains on the LME, after production was disrupted in Indonesia and the Democratic Republic of Congo.

Nickel climbed 2.1 percent to $23,900 a ton, the eighth consecutive gain and the longest rally since April 2007. Aluminum added 1 percent to $2,375.50 a ton after reaching $2,387, the highest price since April 21. Zinc advanced 1.5 percent to $2,228.50 a ton and lead rose 1.3 percent to $2,307.75 a ton. Source: Bloomberg