Copper’s Win Streak Hits Seven Days (Wall Street Journal – May 3, 2015)

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The July contract for copper rose 1.5% on Friday

Copper prices have been running up their largest gains in years, with the market watching China for stimulus moves that might jump-start economic activity and renew demand for the industrial metal.

The most actively traded copper contract, for July delivery, ended higher for a seventh straight trading session Friday, its longest winning streak since December 2013, and has gained 9.9% over the stretch.

Copper is used in the manufacturing of everything from housing to personal electronics, and China’s rapid expansion and heavy investment in infrastructure has made it the world’s largest copper consumer, accounting for 40% of global demand. Copper is also viewed as a key barometer—and beneficiary—of economic growth, and any uptick in Chinese economic activity is viewed as a bullish driver for the market.

China has been aggressively maneuvering to keep its economy humming as it cools down from years of double-digit growth. That has lead to measures such as the one last month to cut the reserve-requirement ratio, allowing banks to lend more money and potentially spur growth.

On Friday, the April reading on China’s official purchasing managers index came in at 50.1, unchanged from March and slightly above market expectations of 50.0. A reading above 50.0 indicates expansion, while any number below that signals contraction.

“This is a Chinese story,” said John Payne, senior market analyst with futures brokerage Daniels Trading in Chicago. “The more negative the data is out of China, the more it’s a bullish indicator [for copper], because of expectations” for additional efforts to pump up the economy, he said.

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