MARKET COMMENTARY
Industrial metals markets will be watching manufacturing, investment, property market and loans data for clues on the strength of its copper demand over coming months. China accounts for nearly half of global copper demand, estimated at around 23 million tonnes this year. Activity in China's manufacturing sector in June quickened from the previous month, in a reassuring sign the world's second-biggest economy kept up a reasonable pace of growth after a solid first quarter.
Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed's last policy meeting on June 13-14 released. The U.S. economy continues to churn out jobs and grow at a steady pace, with investment and consumer confidence both healthy and only moderate signs of risk in financial markets, the U.S. Federal Reserve said. London copper inched up on Monday after a solid U.S. jobs report buoyed hopes that an economic recovery is taking root in the world's top economy, spurring appetite for riskier assets. The data followed expansion in China's manufacturing sector in June, which also underpinned investor demand for metals. U.S. stocks and bonds rallied July 14, with the S&P 500 Index reaching a new intraday high, as U.S. inflation data came in short of Federal Reserve expectations, spotlighting concerns of some central bankers about additional interest rate hikes.
The dollar fell to a more than one-week low against a basket of major currencies, after U.S. President Donald Trump's eldest son released an email chain citing Russian support for his father before last year's U.S. election. A weaker dollar typically draws interest for U.S. dollar-denominated commodities such as copper from investors outside the United States using other currencies. The U.S. dollar hit a 10-month low against a basket of currencies, making dollar-denominated commodities cheaper for holders of other currencies and potentially boosting demand.
Workers at the Zaldivar copper mine in Chile, owned by Antofagasta and Barrick Gold Corp, voted to approve a strike on Monday after talks with the company failed. The nearby Centinela mine is also in negotiations over strike action. Together the two mines produced 340,000 tonnes of copper in 2016.
China's economy grew 6.9 percent in the second quarter from a year earlier, faster than expected and in line with the first quarter's growth. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the April-June quarter.
While oil advanced last week, prices in New York are still below $50 a barrel on concerns expanded global supplies will offset output curbs by the Organization of Petroleum Exporting Countries and its allies. The group’s output climbed last month to the highest this year as members exempt from the deal -- Nigeria and Libya -- pumped more and others slipped in delivering their pledged curbs.
Workers voted to approve a strike at a mine in Chile, following industrial disputes in Indonesia and at the world's biggest copper mine, also in Chile, earlier in the year, that whittled into copper supply. Copper prices hit 4-1/2-month highs on July 17 as better-than-expected economic data from top consumer China and a weak dollar helped reinforce expectations of strong demand. Benchmark copper on the London Metal Exchange ended up 1.2 percent at $6.003 a tonne from an earlier $6,022.5, its highest since March 2.