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London Copper Firmed After Data Showed China's Manufacturers Built on a Recovery

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Core Tip: Reuters reported that London copper firmed after data showed China's manufacturers built on a recovery this month, driving

Reuters reported that London copper firmed after data showed China's manufacturers built on a recovery this month, driving a fifth straight week of gains but a lack of resolution to the US fiscal cliff kept a lid on prices.

Growth in China's vast manufacturing sector picked up in December, a preliminary private survey showed with rises in areas such as new orders and employment underlining a revival in the economy in coming months.

Mr Jonathan Barratt CEO of Barratt's Bulletin said that "Going forward, this is all part of another big growth phase these numbers are good for a reason. Optimism is improving for the first quarter."

China is the world's top copper consumer accounting for 40% of refined demand last year. Hopes are growing for its new leadership to frame policies for new railways and construction, swelling demand for industrial metals.

The country last month approved construction of two city subway projects worth CNY 49 billion adding to a list of railway project approvals aimed at boosting growth in the world's second biggest economy.

Three month copper on the London Metal Exchange traded at USD 8,098.00 per tonne by 0249 GMT off an earlier low of USD 8,046, down from the previous session's close of USD 8,074.

Since copper hit a near two-month high at USD 8,162 a tonne on Wednesday upside momentum has been curbed by a mix of year end profit taking and a stalemate in US talks aimed at averting looming spending cuts and steep tax that threaten to tip the world's top economy back into recession. Copper prices are up more than six percent this year.

The most traded March copper contract on the Shanghai Futures Exchange set course for a third consecutive weekly gain climbing 0.49% to CNY 57,890 per tonne.

President Mr Barack Obama and House of Representatives Speaker Mr John Boehner held a frank face to face meeting on Thursday in an effort to break an impasse in talks to avert the fiscal cliff.

Mr Barratt said that "You're not going to get a solution that will be a 100% but it may be a third or a quarter. It will be something a bit hard to reduce the deficit but they'll get a good vote on it which will make it a good rosy story the US is not interested in can kickers anymore."

China shares significantly outperformed Asian peers on Friday, after the improved manufacturing data, which was adding support to metals, a Hong Kong-based trader said.

 
 
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