Copper Intact After China's Rate Hike
Source: Scrap Monster, T. Tremon (5/13/11)
"Copper prices focused more on indicators of continued economic improvement."
In an attempt to curb the rising inflation in China, it was the fifth time this year that the Chinese government hiked its rates. Being the top consumer of base metals, China's policies have always been a regulator of global metal prices, but this time the market was more optimistic focusing on the glimpses of a global recovery.
On Friday, copper prices were more focused on U.S consumer price data for April due later on the day and European growth rates than the China factor. Copper rebounded from Thursday's drop ahead of U.S data and positive growth reports from Euro region. GDP in the euro area gained 0.8% from the fourth quarter, according to the European Union's statistics office.
According to many analysts, it was largely expected by the traders, and such move from China didn't come as a shock.
While a few traders of the metal noted that bargain hunting also kept copper prices intact..
Hamburg-based Aurubis, the largest European copper smelter, reportedly told Bloomberg that inventories in major futures trading bourses will be a critical indication of the future market trend, along with the strength of physical demand.
Copper for three-month delivery gained $126, or 1.4%, to $8,856 a metric ton by 10:25 a.m. on the London Metal Exchange. Prices rose as much as 1.9%, the most since April 28. The metal for July delivery increased 1.2% to $4.0185 a pound on the Comex in New York.