Copper Rises on China Factory Data as Nickel Trims Drop

Copper rose for the first time in five days and almost all industrial metals gained after better-than-expected factory data from China, the biggest consumer.

Copper climbed as much as 0.8 percent in London. The preliminary Purchasing Managers’ Index for Chinese manufacturing rose to 50.5 from the final reading of 50.2 in August, exceeding the median estimate of 50, according to data today from HSBC Holdings Plc and Markit Economics. Levels above 50 indicate expansion.

“It’s all about China,” Chae Un Soo, a metals trader at Korea Exchange Bank Futures Co., said by phone today from Seoul. “Today, we got better-than-expected results from the manufacturing PMI, which has helped the prices up for metals,” improving short-term sentiment, he said.

Copper for delivery in three months on the London Metal Exchange was up 0.7 percent to $6,770.25 a metric ton at 1:43 p.m. in Hong Kong. Today’s gain reduced this year’s loss to 8 percent, still the worst-performing base metal on the bourse.

Nickel in London earlier fell 3.2 percent to $16,483 a ton. If prices end below $16,800, or 20 percent down from the closing high of $21,000 on May 13, the metal slips into a bear market, meeting the common definition of the status.

Prices of the metal rose as much as 56 percent in 2014, entering a bull market March 18 after a ban on ore exports went into effect in January in Indonesia, the top nickel ore miner.

“You have a look at the nickel inventory run-up over the last 18 months and it’s been quite a strong run,” David Lennox, a resource analyst at Fat Prophets, said by phone from Sydney. “There’s plenty of nickel in inventory to cover production for a wee while.”

‘No Return’

Indonesia’s at “the point of no return” with its ore export ban and will continue with the policy, Edi Prasodjo, director of minerals at the Energy and Mineral Resources Ministry, said at a conference today in Jakarta.

LME stockpiles for nickel have increased 30 percent this year to 339,036 tons as of Sept. 22, according to exchange data. They reached an all-time high on Sept. 18, the data showed. China’s nickel ore imports from the Philippines climbed 6.4 percent in August to a record 5.33 million tons, Chinese customs data showed Sept. 22.

On the LME, aluminum, zinc, lead and tin also advanced.