April 03, 2009

Copper rose to 5-month highs on Friday, boosted by a growing mood of optimism about the demand outlook after a meeting of world leaders agreed a $1.1 trillion package to help revive the world economy.Prices of the metal used in power and construction touched $4,194 a tonne, the highest since November 5. It was at $4,166 a tonne at 1002 GMT from $4,170 at the close on Thursday.Analysts said a key element of the G20 agreement was the $250 billion over the next two years to support global trade flows, forecast to fall 9 percent this year."Trade finance has made life difficult for many exporters, the $250 billion should help conditions improve," said John Meyer, analyst at investment bank Fairfax.

"Commodity markets have been encouraged by the results of the G20 meeting ... manufacturers might start to look at rebuilding the stocks they've been running down." Also a plus was data earlier this week from the United States, the world's largest economy, showing that manufacturing activity contracted at a slower pace in March than in February and a rise in factory goods orders.China's official purchasing managers' index for March, which showed the manufacturing sector expanded in March after contracting in February also helped as the country is the world's largest consumer of copper.