Copper gains for a sixth day on strong EU data

Copper advanced for a sixth day on Tuesday as upbeat economic data from the Euro zone, the third biggest consumer of the metal, boosted demand prospects. Optimism over the stabilizing economic activity in China and expectations for positive retail sales and industrial production in the U.S. also supported prices.

On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at $3.337 per pound at 9:32 GMT, up 1.04% on the day. Futures held in a range between days high at $3.343, the highest since June 6, while days low was at $3.294. The industrial metal rose by 0.11% on Monday, a fifth daily advance in a row, extending current weeks advance to 0.8% after surging 6.5% the preceding two five-day periods.

Copper drew further support on Tuesday amid upbeat economic data from the Euro zone. The single currency bloc is the third biggest consumer of the metal, whose prices tend to surge amid improving economic activity as it is widely used in the industrial production. The Zentrum für Europäische Wirtschaftsforschung (Centre for Economic Research) reported that Germanys ZEW Economic Sentiment rose to a five-month high of 42.0, surpassing analysts expectations for a jump to 39.3 from Julys 36.3 reading. ZEW also said that the leading EU nations ZEW Current Situation index rose to 18.3 in August, well above projections for a rise to 12.0 from Julys 10.6.

Meanwhile, the institute also reported that the Euro zones economic sentiment jumped to 44.0 in August, the strongest level since April 2010, exceeding expectations for a rise to 37.4 from Julys 32.8 figure.

The Euro zones Industrial Production also surprised positively and marked an advance both on monthly and annual basis. Year-on-year, the blocs industrial activity in June met the anticipated 0.3% growth pace, which marked a major improvement compared to the preceding periods 1.3% contraction. Month-on-month, the Industrial Production expanded by 0.7%, up from Mays upward revised contraction of 0.2%, but slightly below forecasts for a 0.9% rise.

The red metal was also supported as Japans Machine Orders contracted well less than expected in June and advanced compared to a year earlier. On a monthly basis, machine orders declined by 2.7%, outperforming analysts projections for a 7% plunge following the previous periods 10% expansion. Year-on-year, the indicator marked a 4.9% improvement, above the anticipated 2.6% gain and below the previous years 16.5% surge.

Apart from the recent upbeat economic data from China, which eased some of the concerns over coppers demand prospects in the top consumer, market players are also expecting overall positive U.S. economic data this week, which should further brighten the industrial metals demand outlook. July’s Retail Sales are due on Tuesday and are expected to have advanced by 0.3%, a probable fourth consecutive monthly advance. Import prices are projected to have outdone the previous period both on annual and monthly basis. On Wednesday, producer prices (Producer Price Index) will likely show a slower advance than the preceding period both year-on-year and month-on-month. Thursday’s consumer inflation (CPI) should have advanced by 0.2% compared to June and 2.0% from a year earlier. Industrial Production is expected to have surged 0.3%, marking the same advance as in June. Both of Friday’s Building Permits and Housing Starts are projected to have advanced last month.