By Ed Ballard
Copper prices rose to a three-month high on Tuesday after a gauge of Chinese manufacturing activity reached its highest level in two years, sending a positive signal about demand from the world's key consumer of industrial metals.
Copper for December delivery settled up 1.1% at $2.2290 a pound on the Comex division of the New York Mercantile Exchange, closing at the highest level since July 26. Tuesday marked the industrial metal's seventh straight day of gains, the longest winning streak since March.
China's official manufacturing purchasing managers' index increased to 51.2 in October from September's 50.4, the National Bureau of Statistics said. The reading, the third straight month of expansion, beat a median forecast of 50.3 from economists polled by The Wall Street Journal.
"Strong Chinese data maintains a strong bid under the base metals complex," wrote analysts at Marex Spectron.
China is the world's largest copper consumer, and the metal has benefited from improved expectations on the health of China's economy and copper demand this year.
A weaker U.S. dollar also helped to boost copper prices on Tuesday. The WSJ Dollar Index was recently down 0.4% at 88.16, making dollar-denominated commodities like copper cheaper for investors using foreign currencies.
Asked in an informal poll what will be the base metals markets' key subject of discussion in 2017, 41% of attendees at a London Metals Week event hosted by Macquarie plumped for "Rising global protectionism," beating out other options including the Chinese property market.
"Protectionism is on the rise and it's only probably going to get worse," saidMacquarie analyst Matthew Turner at the event on Monday. The spread of measures such as the European Union's recently-tightened tariffs on Chinese steel "could be a hindrance to growth," he said.
-- Stephanie Yang and Mark Magnier contributed to this article.
Write to Ed Ballard at firstname.lastname@example.org
(END) Dow Jones Newswires
November 01, 2016 15:12 ET (19:12 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.