Copper makes up ground thanks to Chinese manufacturing

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Thursday, December 1, 2016

The price of copper managed to stage a minor recovery on Thursday in London, thanks to stronger manufacturing data out of China and a weaker US dollar.

Spot copper closed up 0.57% at US$5,773/t (US$2.619/lb) on the London Metal Exchange from Wednesday's US$5,740/t, according to Chile's state copper commission Cochilco.

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While China's Caixin manufacturing PMI in November fell to 50.9 from October's 51.2, this was broadly in line with expectations, as October's figure was a 27-month high, said Capital Economics in a note.

The official manufacturing PMI, however, rose to 51.7 from 51.2, surprising analysts.

"The divergence between the PMIs is probably because large state-owned firms are benefiting more from the ongoing rebound than smaller firms, which are given more weight in the Caixin index," the UK-based economic research firm said in a note.

"While today's data suggest that growth remains strong, much of the current recovery has been driven by policy stimulus, the boost from which is likely to fade soon."

The Wall Street Journal Dollar Index, which measures the greenback against a basket of 16 currencies, was down 0.24% to 91.76 on Thursday afternoon.

Aluminum closed 0.1% higher on Thursday at US$1,724/t, while lead was up 1.9% to US$2,374/t and nickel rose 2.2% to US$11,210/t. Zinc was 1.1% higher at US$2,740/t, while tin was up 0.2% to US$21,400/t, and molybdenum steady at US$15,250/t.