(Corrects quarterly gain in second paragraph in story published yesterday.)
July 1 (Bloomberg) -- Copper prices climbed to a 16-week high in London as manufacturing expanded at the fastest pace this year in China, the world’s largest user of the metal used in pipes and wires.
The Purchasing Managers’ Index in June was 51, matching estimates by analysts, Chinese government data showed today. Readings above 50 signal expansion. In the second quarter, copper rose 5.9 percent, the most since September.
“The market rallied on the Chinese economic data,” Tom Power, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. Gains were capped after the U.S., the second-largest copper user, reported slowing construction spending, he said.
Copper for delivery in three months rose 0.1 percent to settle at $7,020 a metric ton ($3.18 a pound) at 5:50 p.m. on the London Metal Exchange. Earlier, the price reached $7,028.50, the highest since March 7.
On the Comex in New York, copper futures for September delivery gained less than 0.1 percent to $3.204 a pound.
U.S. construction spending in May rose 0.1 percent after a 0.8 percent gain in April, the Census Bureau said today. The median estimate in a Bloomberg survey called for an increase of 0.5 percent. The Copper Development Association estimates that construction accounts for 40 percent of demand. The Institute for Supply Management’s factory index also trailed forecasts.
Zinc for delivery in three months on the LME dropped 1.4 percent to $2,185.50 a ton. Earlier, the price reached $2,222, the highest since Feb. 13, 2013.
The metal’s 14-day relative-strength index yesterday rose above 70, signaling to some analysts who study technical charts that prices are poised to drop. Canceled warrants, or orders to remove the metal from warehouses monitored by the LME, declined 87 percent this year.
Aluminum and lead fell, while nickel and tin gained.