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Improved PMI data props up copper futures

2014-05-26 09:47 Global Times Web Editor: Qin Dexing
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Copper futures climbed higher on the Shanghai Futures Exchange (SHFE) Friday after news of a rise in manufacturing activity in May, according to a report by Hong Kong-based financial information provider aastocks.com last week.

The most-traded copper contract for delivery in August ended at 48,700 yuan ($7,810.37) per ton on the SHFE Friday, up 440 yuan or 0.91 percent from Thursday.

The market finished the week with a 1.01 percent week-on-week rise. The trading volume fell by 132,476 lots Friday from Thursday's 448,842 lots.

HSBC released data Thursday showing a flash Manufacturing Purchasing Managers' Index (PMI) for May of 49.7, a five-month high, and up from a final reading of 48.1 in April.

"The improvement was broad-based with both new orders and new export orders back in expansionary territory. Disinflationary pressures also eased over the month and output prices increased for the first time since November 2013," Qu Hongbin, chief economist for China at HSBC, was quoted as saying by Reuters Thursday.

The better PMI data helped raise the prices of industrial products like copper, aastocks.com reported Thursday, citing Song Lu, an analyst at Shanghai-based Soochow Futures Co.

Friday's rise in copper futures was also partially because of investors' growing expectations that the central government will ease controls on the property market, according to a report by London-based metal information provider Metal Bulletin Friday.

However, the HSBC PMI reading was still below the line of 50, which distinguishes expansion from contraction.

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