London copper prices on Friday rebounded from a sharp fall in the previous session, as a private survey showed manufacturing activity in top consumer China was better than expected.
China’s factory activity unexpectedly expanded at the fastest pace in well over two years in October as new export orders rose and plants ramped up production, a private business survey showed.
But the better-than-expected results stand in contrast with an official survey published on Thursday, which showed China’s factory activity shrank for the sixth straight month in October.
The official survey focuses more on heavy industry than Caixin’s, and the two surveys cover different places in China, the world’s biggest user of copper that is widely used in manufacturing.
Three-month copper on the London Metal Exchange (LME) was up 0.8% at $5,845 a tonne, as of 0406 GMT, recovering from a 1.9% drop in the previous session, which was the biggest fall in almost three months due to weak China data on Thursday.
“The market indicates prices are up today due to the Caixin data. However, the impact of the PMI data is limited,” said a China-based base metal analyst.
Gains in copper prices were capped by uncertainty over whether the United States and China can reach a trade deal.
Prices of the red metal, often used as a gauge of global economic health, have been hurt by a prolonged trade war between the United States and China. LME copper has lost 2% so far this year, after dropping 18% in 2018.
The most-traded copper contract on the Shanghai Futures Exchange fell as much as 1.3%, reflecting overnight losses in London, but later recovered to decline 0.6% to 47,070 yuan ($6,683.71) a tonne at the Asian midday break.
FUNDAMENTALS
* TRADE DEAL: U.S. President Donald Trump said the United States and China would soon announce a new site where he and Chinese President Xi Jinping will sign a “Phase One” trade deal after Chile cancelled a planned summit set for mid-November.
* NICKEL: Nickel miner Independence Group NL said it will stop work on developing a downstream nickel sulphate facility after winning improved terms in two recent off-take agreements for concentrate from its Nova mine.
* SK INNOVATION/AUSTRALIAN MINES: Battery materials developer Australian Mines Ltd said a cobalt and nickel supply agreement with South Korean battery maker SK Innovation has been terminated.
* AURUBIS: Europe’s largest copper producer Aurubis AG remains on the hunt for takeovers with a war chest of about $1 billion, Chief Executive Roland Harings said.
* PRICES: LME aluminium edged up 0.3%, nickel advanced 0.6%, zinc increased 0.6% and lead rose 0.5%. In Shanghai, aluminium advanced 0.4%, zinc eased 0.1% while lead fell 0.5% and tin dropped 0.9%.
