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Strong manufacturing data boosts Shanghai copper prices

2014-07-28 08:33 Global Times Web Editor: Qin Dexing
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The Shanghai Futures Exchange (SHFE) copper prices increased on Friday mainly due to China's positive manufacturing activity in July.

According to the preliminary data released by HSBC on Thursday, the China Manufacturing Purchasing Managers' Index (PMI) climbed to 52.0 in July from June's 50.7, hitting an 18-month high.

"Economic activity continues to improve in July, suggesting that the cumulative impact of mini-stimulus measures introduced earlier is still filtering through," Reuters reported Thursday, quoting Qu Hongbin, chief economist for China at HSBC.

The most-traded copper futures for September finished at 51,040 yuan ($8217.44) per ton on the SHFE on Friday, an increase of 390 yuan or 0.77 percent compared to Thursday.

The copper price was up by 2.6 percent from the previous Friday. The trading volume fell by 59,048 lots on Friday from Thursday's 331,520 lots.

China accounts for more than 40 percent of the demand for refined copper globally. The rising factory activities led to a surge in new orders which will be helpful to lift the copper market in a short term, Xiamen-based Ruida Futures Co said in a report on Friday.

However, the copper industry is still facing risks due to its overdependence on the Chinese property market, according to a research note released by investment bank Goldman Sachs on Thursday. The sluggish Chinese property market might weigh on copper prices in the future.

In addition, domestic consumers' demand for copper is still limited due to seasonal factors, which might push copper prices down in the physical copper market, according to the report from Ruida Futures on Friday.

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