Copper at 2-month high on China economic data

Copper advanced for a fourth straight day on Friday following overall positive China data, which boosted sentiment that the worlds top consumer of the red metal is in process of stabilizing its economic activity.

On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at $3.272 a pound at 8:06 GMT, up 0.05% on the day. The industrial metal plunged to a days low of $3.242 a pound during Asian trading on a worse than expected consumer inflation, but rebounded back to positive territory to hit a 2-month high at $3.282 a pound following upbeat Industrial Production figures. Copper rose 2.51% on Thursday, a third daily gain in a row, extending its current weeks advance to over 3.2% so far after surging 2.05% the preceding five-day period.

Copper fell to a days low during the Asian session as Chinas July Consumer Price Index remained steady with a 2.7% rise year-on-year, aligning with the previous month’s reading but underperforming expectations for a 2.8% rise. On a monthly basis, CPI met projections at a 0.1% increase. On an annual basis, China’s Producer Price Index (PPI) declined by 2.3%, above the anticipated 2.2% but outdoing the preceding period’s 2.7% fall.

Xu Liping, an analyst at HNA Topwin Futures Co, said for Bloomberg: “The CPI data is a bit disappointing because that also mirrors relatively weak social consumption in China.”

The industrial metal however rebounded to a two-month high later in the day as data showed China’s industrial production surpassed analysts’ expectations for a 9.0% surge and rose by 9.7% in July, the biggest climb this year, beating June’s 8.9% gain. This offset a bit worse than expected retail sales, which rose by 13.2% in July, below forecasts for a 13.5% surge and last month’s 13.3% gain.

Copper was shot more than 2.5% on Thursday as the Chinese General Administration of Customs reported the country’s exports rose by 5.1% in July after contracting 3.1% in June. Expectations for a 3% climb were exceeded. Meanwhile, imports also surpassed analysts’ projections for a 2.1% jump and surged 10.9% last month following a 0.7% decline in June. The Chinese trade surplus narrowed to $17.82 billion from $27.10 billion a month earlier and confounded economists’ forecasts for an increase to $27.20 billion. The Asian nation is the world’s biggest copper consumer and accounts for more than 40% of global consumption. The Chinese government announced last month that it is ready to take measures to protect its 7.5% economic growth target for the year, which boosted sentiment for raw materials demand.