By Business A.M.
Copper prices extended gains on Thursday, underpinned by optimism over recovering demand in top metals consumer China as speculators acted on upbeat technical signals.
On Thursday, three-month copper on the London Metal Exchange (LME) rose 0.9 per cent to $8,858 a tonne,maintaining its upward swing from the previous session.
According to market data, prices had touched their lowest in more than two weeks the previous day but closed in positive territory and above the 100-day moving average, a positive technical signal.
Nitesh Shah, commodity strategist at WisdomTree, observed that copper is bouncing from the recent lows seen in previous sessions.
Ahead of the Easter weekend, Shah said, “The fundamentals remain strong and the latest Chinese PMI was pretty positive, with the composite way above the marker for expansion.”
Meanwhile, the Caixin/S&P’s composite purchasing managers’ index (PMI), which includes both manufacturing and services activity, rose to 54.5 in March, marking the quickest expansion since June, data showed on Thursday.
Market participants said the latest survey provided some upbeat news after last week the PMI for the manufacturing sector faltered owing to weak export orders.
Other data showed improved demand in China for the red metal used in power, construction and air conditioning sectors.
The Yangshan copper premium, which reflects demand for copper imported into China, advanced $32.50 a tonne on Tuesday for its first increase since March 17.
Also supporting the market was news that a joint copper mining project by Ecuador’s state-run ENAMI and Chile’s Codelco has been told to suspend operations.
Other base metals traded in bullish territory as LME aluminium gained 0.7 per cent to $2,350 a tonne, zinc advanced 0.5 per cent to $2,802.50 a tonne after touching a five-month low the previous day, lead rose 0.5 per cent to $2,120 a tonne, tin was up one per cent to $24,500 a tonne,while nickel was little changed at $22,700 a tonne.