Copper price races ahead despite doubts over Chinese trade data
The copper price jumped 2.4% on Wednesday after better-than expected trade numbers from China renewed optimism about the health of the world's second largest economy.
In early morning trade in New York spot copper was changing hands at $3.33 a pound or just over $7,340 a tonne, an almost one-month high.
The red metal was boosted by data showing China's exports surging 14.7% compared to estimates of a single digit rise. The country's trade account also went into an $18.2 billion surplus, compared to March’s $884 million deficit.
The red metal's rise came despite widespread skepticism of the accuracy of the Chinese figures which showed a 66% jump in exports to Hong Kong but a decline in trade with the EU, China's biggest trading partner.
The red metal was also boosted by further reductions in London Metal Exchange and Shanghai warehouse stocks.
LME inventories – a good indicator of overall demand – have almost tripled since October 2012 to above 600,000 tonnes on fears of a slowdown in China.
Stocks hit levels last seen in 2003 late in April but have steadily declined since then.
China is responsible for 42% of total global demand of 20.5 million tonnes and its infrastructure investment-led growth has been a major factor in driving the copper price. In 2003 copper was worth 75c a pound.
Copper is still down 6% year to date, but is up sharply from 18-month lows of $3.06 last week after an almost 7% jump on Friday.