GLNCY Glencore Plc (PK)

   By Ese Erheriene 

LONDON--Copper futures closed higher in London on Thursday, following weaker-than-expected U.S. manufacturing data that has firmed expectations that the Federal Reserve won't raise interest rates until next year.

With China's economy looking weaker many market participants are also increasingly predicting more fiscal stimulus from Beijing, which they hope will boost demand for copper from the world's biggest consumer of metals.

The London Metal Exchange's three-month copper contract closed up 0.2% at $5,308 a metric ton at the PM kerb close.

The Federal Reserve Bank of Philadelphia said its index of general business activity covering the mid-Atlantic factory sector rose to -4.5 in October from -6.0 in September. A reading below zero represents contraction.

Meanwhile, the Federal Reserve Bank of New York's Empire State business-conditions index rose to -11.4 this month from -14.7 in September. Though improved, the index is still in contractionary territory.

"Weak economic data in China and the U.S. have clearly led market participants to expect that further stimulus measures will be implemented in China and that the [U.S. Federal Reserve] will not raise interest rates this year," said Commerzbank in a research note.

Keeping interest rates low would likely soften the dollar, which is good news for dollar-denominated commodities like copper, as it makes them cheaper to buy for those holding stronger currencies.

Recently, copper has also benefited from announcements made by commodities giant Glencore PLC (GLEN.LN, GLNCY, 0805.HK) that it will close down some supply of the industrial metal.

Increasingly, though, analysts are concluding that given an expected fall-off in Chinese demand, other mining companies must also cut supply for it to have a meaningful effect.

"Announced cuts in industry are not enough to provide strong support for prices," said Georgy Buzhenitca, a Moscow-based analyst at Deutsche bank.

Among the other base metals, aluminum closed down 1.2% at $1,574 a ton, zinc closed up 0.6% at $1,827 a ton, nickel was flat at $10,550 a ton, lead closed up 0.1% at $1,795 a ton and tin was down 0.3% at $16,050 a ton.

-Alistair MacDonald and Tatyana Shumsky contributed to this article.

   Write to Ese Erheriene at ese.erheriene@wsj.com 

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(END) Dow Jones Newswires

October 15, 2015 13:40 ET (17:40 GMT)

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