* HSBC Flash PMI for China hits 4-month high of 50.1
* Korea Zinc buys from LME zinc stocks in Malaysia
By Silvia Antonioli and Harpreet Bhal
LONDON, Aug 22 Copper rose on Thursday after
manufacturing data for August from top metals consumer China
suggested the world's second-biggest economy might be
stabilising and its demand for commodities could pick up.
Activity in China's manufacturing sector hit a four-month
high as new orders rebounded, a preliminary private survey
The Flash HSBC Purchasing Managers' Index rose just above
50, marking a return to growth in manufacturing activity, albeit
"There was a very positive reaction to the Chinese
manufacturing data today since we are back above 50, and that
suggests the government's 7 to 7.5 percent growth target could
still be achieved this year," VTB Capital analyst Andrey
"There is also some technical buying taking place but little
development on the spot physical market just yet, so I expect
prices will remain broadly in range in the short term."
Benchmark copper on the London Metal Exchange (LME)
ended at $7,320, from a last bid of $7,240 on Wednesday, after
hitting a session high of $7,389.
The metal has rebounded 11 percent from a three-year trough
in late June but is still down about 7 percent this year.
Data showing Germany's private sector expanded in August at
its fastest rate since January was also supportive and a further
sign that Europe is on a recovery track, which bodes well for
China is already building, or has approved, more than half
of a $100 billion network of high-voltage power lines to connect
remote energy-producing regions to the east coast, a top
official at the state grid firm told Reuters.
China accounts for 40 percent of refined copper demand and
the power sector is its biggest consumer due to the metal's high
Clouding the outlook for metals is uncertainty over the
impact of the U.S. Federal Reserve's plans to start tapering its
stimulus measures soon.
Minutes from the latest monetary policy meeting showed a few
Fed officials thought it would soon be time to slow the pace of
their bond buying "somewhat".
Tapering expectations pulled emerging market currencies and
shares down and boosted the dollar and U.S. debt yields on
INTL FCStone analyst Edward Meir said that signs of
improvement in the U.S. economy could give the Fed additional
justification to start moving on its tapering programme in
"However, we still don't think that investors have fully
discounted September as being a potential start date, and so
various complexes could run into more selling pressure next
month as this realisation sets in," he said.
Latest data showed the number of Americans filing new claims
for jobless benefits held near a six-year low last week, and
U.S. manufacturing activity hit a five-month high this month,
suggesting the economy is starting to find firmer footing.
Korea Zinc has bought zinc from LME stocks in
Malaysia to meet contractual sales amid a supply shortage in the
region and a pick-up in Chinese demand, traders said.
Traders said premiums for zinc have climbed about $20 in the
last week, with estimates at $180-$205 FOT (free on
Zinc closed at $1,974 from $1,967 on Wednesday,
while aluminium ended at $1,884 from $1,897, and lead
closed at £2,209 from $2,213.
Nickel ended at $14,430 from $14,425, and tin
, untraded at the close, was bid at $21,875 from a close
of $21,800 on Wednesday.