Copper Surges on Improved China Manufacturing Data
The price of copper rose Monday on the latest sign that China's manufacturing industry is getting healthier, even as the U.S. sector slows down.
Copper for March delivery rose 0.85 cent to finish at $3.6585 per ounce. That's the highest price since Oct. 18.
Separate reports from HSBC and the state-sanctioned China Federation of Logistics & Purchasing showed the country's manufacturing industry expanded in November from October. New orders and export orders increased. It was the latest indication that the world's second-largest economy is pulling out of its economic downturn.
China is a huge importer of commodities. Investors are hoping the improvement will translate into stronger demand for raw materials such as industrial metals and oil.
Meanwhile, the Institute for Supply Management said its latest index of U.S. manufacturing conditions declined to 49.5 in November, the weakest level since July 2009. New orders fell and manufacturers reduced their inventories, an indication that they are expecting weaker demand.
Manufacturers are worried about negotiations between President Barack Obama and Congress over the U.S. budget, the ISM said. Automatic tax increases and government spending cuts will take effect Jan. 1 if the two sides fail to reach a compromise.
Some concerns about manufacturing were eased by other positive economic reports, including an increase in U.S. construction spending in October. U.S. automobile sales also rebounded last month as Superstorm Sandy boosted demand. That benefited platinum and palladium, which are used in catalytic converters.
Platinum for January delivery rose $9.20 to finish at $1,613.80 per ounce and March palladium rose $3.05 to $691.25 per ounce. March silver gained 48 cents to $33.759 per ounce. Gold for February delivery rose $8.40 to $1,721.10 an ounce.
Other commodities were mostly higher.
Benchmark oil rose 18 cents to end at $89.09 per barrel, heating oil fell less than a penny to $3.0562 per gallon, wholesale gasoline fell less than a penny to $2.7265 per gallon and natural gas gained 3 cents to $3.591 per 1,000 cubic feet.
In March agricultural crop contracts, wheat fell 2.75 cents to finish at $8.6075 per bushel and corn rose 2 cents to $7.5475 per bushel. January soybeans gained 15 cents to $14.5375 per bushel.