Copper Gains with Other Metals as China Returns in Positive Mood

SEATTLE (Scrap Monster): Copper rose alongside other metals as Chinese traders returned in a buying mood from a week-long holiday that had temporarily muted activity in Asian markets.

Futures on the London Metal Exchange rose as much as 1.2% on Thursday, climbing immediately after the opening of China's main bourse. Other major contracts on the LME also rallied, as did iron ore futures in Singapore.

Copper is also drawing support from a strike at a key mine in Chile. Two unions at Antofagasta Plc's Centinela project began action on Wednesday and said the walkout would start affecting production within about two weeks. While the operation has maintained feed to its processing plants, much of its mine movement and development has stopped, the unions said. Antofagasta earlier said projected output remained unchanged.

Traders are also watching the US Federal Reserve's interest rate path, pricing in a 20% chance of further tightening in October and an 80% chance in December. Higher borrowing costs typically curb investor demand for commodities, which bear no interest.

The red metal is still consolidating after rising to a record last month on concerns that US tariffs on refined copper would lead to a rush of supplies to America and cause a squeeze elsewhere. Crucial to the outlook now is demand from China, the world's biggest consumer, where recent data has pointed to industrial weakness.

Copper gained 1% to trade at $14,617.50 a ton on the LME by 10:22 a.m. Singapore time. Zinc climbed 1.3% and aluminum added 0.7%. Iron ore futures in Singapore rose 0.5% to $91.95 a ton.

Courtesy: www.uk.finance.yahoo.com