Copper Prices Rise On China DataBy Ira Iosebashvili
Copper prices rose to their highest level in more than three weeks Tuesday, after Chinese data suggested the economy of the world's largest market for the industrial metal continues to remain strong, despite expectations of a slowdown.
China attracted $10.76 billion of foreign direct investment in January--up 16.1% on year, the country's Ministry of Commerce said. Those numbers come on the heels of trade data released last week that showed an unexpected surge in both imports and exports, yet another sign of health in an economy that was predicted to slow after decades of rampant growth.
While investors believe Chinese data may be prone to distortion, the numbers were enough to buoy the price of copper for March delivery, the most actively traded contract, 0.7% to $3.286 per pound, the highest level since Jan 24. China, the world's second largest economy, accounts for 40% of the world's copper market.
"The market is doing a real double take after the China data," said Stephen Platt, futures strategist for Archer Financial services.
Concerns that growth in China's economy is continuing to cool had been heightened earlier this month, after a series of purchasing managers' indexes released by the Chinese government and HSBC PLC showed that both the manufacturing and services sectors lost momentum in January. HSBC's manufacturing PMI showed a contraction in China's business activity for the first time since July, and the government's index, while positive, was only slightly stronger.
Overall, concerns over China's economy have weighed on copper prices. Copper futures hit a two-month low of $3.1750 on Feb. 3, locking in their longest losing streak in 18 years, and have recovered only marginally since then.
Write to Ira Iosebashvili at Ira.Iosebashvili@wsj.com
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