LAUNCESTON, Australia, July 3 Copper reached a three-month high after a surprise rise in China’s Purchasing Managers’ Index (PMI), and while the boost was short-lived it does beg the question as to whether better times are ahead for the industrial metal.
Benchmark London copper futures touched $5,965 a tonne on June 30 after the official Chinese PMI rose to 51.7 in June, it’s eleventh consecutive month on the positive side of the 50-level that marks expansion from contraction in the world’s biggest manufacturing sector.
Copper’s gains didn’t last beyond the Asian session, slipping as the U.S. dollar strengthened and also as London Metal Exchange data showed inventories of the red metal gained, indicating supplies are plentiful. Nonetheless, copper is holding around its strongest levels since March, and is up 8.2 percent since its recent closing low of $5,486 a tonne on May 8.
Hedge funds and other money managers also seem to be backing the view that copper’s recent rally still has further to run, boosting long positions by 9,531 contracts to 58,816, according to U.S. Commodity Futures Trading Commission data, released on June 30.
The net-long copper position is now nearly double the 29,787 contracts reported on May 9, and a dramatic reversal from the net-short position of 47,109 contracts that prevailed a year ago, on June 14, 2016. It’s probably no surprise that hedge fund managers have switched from net-short to net-long copper as the Chinese manufacturing sector has improved over the past year.
For the rest of this article: http://www.reuters.com/article/column-russell-copper-china-idUSL3N1JU28J