Industrial metals rise on stronger factory orders

AP News
Posted: Aug 31, 2011 4:25 PM
Industrial metals rise on stronger factory orders

Industrial metal prices rose Wednesday after factory orders jumped last month, giving investors some hope that the manufacturing industry is improving.

The government said factory orders rose 2.4 percent in July after dropping 0.4 percent in June. Some of the increase was credited to stronger demand for cars and commercial airplanes. The encouraging news supported copper, platinum and palladium, which are used in a variety of manufactured goods, from electronics to automobiles.

Manufacturing grew weaker last spring after the March earthquake and tsunami disrupted supply chains in Japan and the overall economy slowed. Economists at RDQ Economics said the July increase in factory orders may suggest manufacturing will grow modestly.

CPM Group metals analyst Catherine Virga said demand is expected to pick up this fall for copper, which already is in short supply globally. However, she cautioned that the market is vulnerable to shifts in investor sentiment so there is the possibility of a correction.

Copper for December delivery rose 6.3 cents to end at $4.2045 a pound, October platinum rose $3.10 to $1,856.20 an ounce and December palladium rose $11.15 to $790.45 an ounce.

In other trading, gold prices rose as investors remained concerned about Europe's sovereign debt problems.

Country Hedging Inc. market analyst Sterling Smith said he expects gold to continue to increase, perhaps as high as $2,250 an ounce by the end of the year, because of the unsettled global economy. In addition to European debt issues, there are financial problems in the United States and China is working to slow its economy and curb inflation.

HSBC analyst James Steel said investors are speculating about whether the Federal Reserve plans to implement additional measures to stimulate economic growth.

The Federal Reserve released the minutes from its Aug. 9 policy meeting Tuesday that showed central bank officials discussed a variety of options to bolster the economy, including buying more Treasury bonds. "If you're forward-looking, it would imply higher gold prices," Steel said.

Gold for December delivery rose $1.90 to end at $1,831.70 an ounce and September silver rose 30.4 cents to end at $41.768 an ounce.

Natural gas rose 14.5 cents to end at $4.054 per 1,000 cubic feet on the New York Mercantile Exchange.

In other Nymex trading, benchmark crude fell 9 cents to finish at $88.81 per barrel, heating oil rose 0.73 cent to $3.084 per gallon and gasoline futures increased 3.48 cents to $2.8763 per gallon.

December wheat rose 0.75 cent to $7.915 per bushel, December corn fell 7.75 cents to $7.675 per bushel and November soybeans rose 0.5 cent to $14.575 per bushel.


AP Business Writers Martin Crutsinger and Christopher Leonard contributed to this report.