2014.08.1504:29:46UTC+00Copper led metals climb behind potential global stimulus

Copper recovered from earlier hitting its lowest in eight weeks to lead the climb of several industrial metals as speculation rises for more incoming stimulus.

Futures for copper with a delivery date in three months reached a price per metric ton as high as $6,850.75 today after gaining 0.4%. It was trading late morning Tokyo time at $6,840.75 on the London Metal Exchange (LME) up from yesterday’s lowest close in nearly a month of $6,825. This week, copper has dropped by 2.2% to deepen its decline for the year to 7.1% to be the worst performer among the LME’s six main metals.

Copper for December on the New York market was mostly unchanged and traded at a price per pound of $3.1135. Contracts for the metal in October in Shanghai lost 0.2% to 48,820 yuan, or $7,936 per ton.

Data from the National Bureau of Statistics showed that July’s output levels of copperl in China climbed to its highest since November.

Economies all over the world have showed various signs of weakness through the reports released earlier this week which may push central banks to maintain or increase stimulus, Claims for unemployment benefits in the US increased more than expected amidst disappointing retail sales in what is the world’s largest economy while credit sharply declined in China. Japan’s gross domestic product contracted and growth in the eurozone was absent both during the second quarter.

Metals trader Chae Un from the Korea Exchange Bank Futures LTd. explains the rise of metals by saying, “It’s a combination of a technical rebound and expectation of more stimulus to support growth.”

As a result, the index tracking the LME’s six main metals has retreated by 1.7% this week, the largest since March 14th, and is on its way for a third weekly fall.  Zinc, lead, and aluminum all saw their values increase on the LME.