RTRS: Shanghai copper rises 1.1 pct on US jobs data
By Manolo Serapio Jr.
MANILA (Reuters) - Copper rose on Monday, building on gains in the previous session, as better-than-expected jobs data boosted hopes of recovery in the United States, the world's largest economy and a major consumer of industrial metals.
Expectations that Chinese demand will remain sturdy, after the country signalled it would maintain its economic stimulus measures, also aided prices ahead of a slew of China data due out this week. Demand from China pushed copper prices more than 140 percent higher in 2009.
"There's certainly some positive sentiment helping the base metals at the moment, and prices did draw some support from the relatively favourable data that we saw out of the U.S.," said David Moore, commodity strategist at Commonwealth Bank of Australia.
U.S. employers cut fewer jobs than expected during snow-battered February and the unemployment rate held steady at 9.7 percent, bolstering views the economy was on the brink of creating jobs.
Shanghai's third-month copper rose 660 yuan to 60,410 yuan a tonne at the midday break, after gaining 3 percent last week.
Chasing copper's rise, Shanghai zinc jumped 2.7 percent to 18,920 yuan, approaching its 5 percent ceiling of 19,175 yuan.
Three-month copper on the London Metal Exchange edged up $30 to $7,575 a tonne, adding to Friday's $175 gain.
The metal surged 5 percent last week due to initial supply worries fuelled by a massive earthquake at top producer Chile which have since dissipated after key mines resumed operations.
This week, all eyes will be on China economic data, including February trade figures which should include preliminary copper import numbers.
"I expect China's demand for base metals will remain strong this year. But I think January and February can be quite a difficult period for copper imports because you've got the Chinese New Year holiday affecting the pattern there," Moore said.
"Overall the Chinese economy should continue to grow strongly even though Chinese authorities want to ensure it doesn't generate inflationary pressures."
Chinese Premier Wen Jiabao said on Friday the country would stick to an appropriately easy monetary stance and an active fiscal policy, suggesting China's demand for raw materials will remain high.
"We retain our bullish short-term view of copper, with the price expected to move above $8,000/tonne over the next 2-3 months on strong Chinese demand and improving demand outside of China," Macquarie said in a note.
"In Europe and the U.S. in particular, we have seen a sharp rise in cancelled warrants over the past two weeks, with the rise in cancelled warrants in Europe lining up with stronger physical premiums and reports of improving demand in the region," it added.