Copper futures rise amid investors' hopes for govt support

Copper futures climbed higher on the Shanghai Futures Exchange (SHFE) Friday, partly due to hopes for new support policies after the low April reading for the consumer price index (CPI) and producer price index (PPI), according to a report by London-based metal information provider Metal Bulletin (MB) Friday.

The most-traded copper contract for delivery in August finished at 47,270 yuan ($7,590.28) per ton on the SHFE Friday, up 0.98 percent or 460 yuan from Thursday.

The market was closed on the previous Friday due to the Labor Day holidays.

The trading volume climbed by 16,070 lots Friday, compared to Thursday's 267,696 lots.

China's CPI, the main gauge of inflation, climbed by just 1.8 percent year-on-year in April, an 18-month low, data from the National Bureau of Statistics (NBS) showed on Friday. Also, China's PPI fell by 2 percent year-on-year in April. The CPI and PPI readings triggered speculation about potential supportive policies to spur economic growth, boosting sentiment among investors, the MB report said.

Copper futures started strongly on the SHFE last week, with the most-traded July contract climbing as high as 47,920 yuan on Monday, the highest level in nearly two months, due to steady demand in the domestic market as well as high expectations for recovery in the US economy, according to a report by Reuters last week.

China's copper imports rose by 7.2 percent in April from March to 450,000 tons, according to data released Thursday by the General Administration of Customs.

The increase could be partly thanks to buying by the State Reserves Bureau (SRB), the country's commodity stockpiler, according to Reuters.

"SRB buying has already pushed up (yuan) premiums in the domestic market," Zhou Jie, a dealer and senior analyst at Shanghai-based China International Futures Co, was quoted as saying by Reuters.

Zhou also said that high premiums for refined copper are likely to encourage more importers purchase copper in the international market in May and then resell it in the domestic market.