The base metals were grinning green on Wednesday. Copper rose from the pre-dawn hours to late morning, cresting above $2.34, before pulling back to finish at $2.311/lb., up more than 5½ cents.

Nickel was up very powerfully to the same late morning point, reaching $7.45 before easing to close at $7.3081/lb., up 39 cents. Zinc followed a similar path, just coming off its intraday highs to end at $0.7042/lb., up nearly 2 cents. Aluminum had a strong day, adding better than a penny and a half, to $0.738/lb., while lead completed the up day, adding 2 cents, to $0.7808/lb.

Copper led the industrial metals upward yesterday, rising to a 2½-week high, as positive manufacturing data out of China helped to boost traders’ confidence in the world economy.

The China Purchasing Managers’ Index (PMI) rose in June to 51.8 from 51.2 in May, a modest enough gain, but an indication of further expansion in the country’s manufacturing sector.

“The Chinese PMI has helped, everyone is looking to China to remain a positive factor,” said said Alex Heath, of RBC Capital Markets. However, Heath cautioned that “we are talking about a market slowing as we go into the summer period.”

David Wilson, an analyst at Societe Generale in London, noted that while “copper was stronger than expected in the first half …We expect a lot of volatility in the third quarter and sideways trade.”

Also factoring in, “Copper has had a tremendously close correlation with the stock market in the past few months,” said Donald Selkin, of National Securities Corp. in New York. “People are looking at the stock market as a symbol of worldwide economic recovery.”

Stockpiles were little changed, with inventories monitored by the LME dropping a mere 225 metric tons yesterday, to 265,725 tons.

Source: Base Metals All Gain