METALS-Copper up on China factory data, in line for weekly gain

Friday, 1 Nov 2013 | 9:30 AM ET

* Nickel outperforms in Oct, up 4.5 percent on Indonesian ban

Pan Pacific sets most 2014 China copper premiums at $123/T

* Coming up: U.S. ISM manufacturing PMI at 1400 GMT

(Updates with official prices)

By Susan Thomas and Melanie Burton

LONDON/SINGAPORE, Nov 1 (Reuters) - Copper rose on Friday after a strong Chinese manufacturing sector survey and was set for its biggest weekly gain in six weeks on growing signs of economic stability in the world's top metals consumer.

China's manufacturing sector grew at its fastest pace in 18 months in October, the official Purchasing Managers' Index showed, while a private sector report showed a jump in new export orders.

Three-month copper on the London Metal Exchange was $7,264 a tonne in official rings, from $7,250 at the close on Thursday.

"We had the slightly better PMI overnight, which saw copper go up $20 in an instant on the back of that," Marex Spectron analyst Vicky Sanders said.

The People's Bank of China also injected a net 29.1 million yuan ($4.8 billion) into money markets this week, easing tight credit conditions. This helped underpin base metals prices, Sanders said.

Copper struck a one-week peak at $7,300 on Thursday but that was still within a $7,000-7,420 band in place since early August. The metal finished October down around 1 percent.

The dollar index rose to a two-week high, helped by data on Thursday showing strong Chicago business activity, which fuelled speculation the national ISM survey of manufacturing, due later on Friday, could also deliver a positive surprise.

The stronger dollar tempered gains in commodities by making them more expensive for holders of other currencies.

Reflecting expectations of robust copper demand next year, Pan Pacific Copper, a unit of JX Holdings Inc, set 2014 copper premiums for Chinese buyers mostly at $123, up 45 percent from this year, a company spokesman said.


Benchmark nickel was $14,615 per tonne in rings, from $14,630 at the close on Thursday.

Nickel had outperformed the base metals complex in October, rising more than 4 percent for the month, as traders positioned themselves for an export ban by Indonesia scheduled for next year.

"On nickel, it felt like people were putting bets on the Indonesia ban coming into place. But our view is the ban will not be enforced in its current format but will likely be watered down," analyst Joel Crane at Morgan Stanley in Melbourne said.

Indonesia, the world's top exporter of nickel ore, has said it plans to ban exports of unprocessed ore from January 2014.

That potential ban and production cutbacks could lift the price of this year's worst-performing base metal by more than 20 percent from multi-year lows, analysts said.

Benchmark tin was $22,925 a tonne in rings from a last bid of $22,850 on Thursday.

Tin trading volumes on Indonesia's only approved exchange rose to around 3,000 tonnes last month from 795 tonnes in September, signalling a partial recovery in shipments by the world's top exporter.

Aluminium was $1,862 from $1,859 at the close, while zinc was $1,951 from $1,952 and lead, untraded in rings, was bid at $2,194 from $2,184.50.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin

($1 = 6.0945 Chinese yuan)

(Editing by David Cowell and Jane Baird)