LONDON: Copper clawed higher on Friday after upbeat Chinese manufacturing and US jobs data, but uncertainty about global growth and trade tensions will likely weigh on the market, analysts said.

China’s factory activity unexpectedly expanded at the fastest pace in well over two years in October, as new export orders rose and plants ramped up production, a private business survey showed.

The results stand in contrast to an official survey published on Thursday, which showed China’s factory activity shrank for the sixth straight month in October.

“The PMIs in China have been oscillating between expansion and contraction for the last couple of months,” said Geordie Wilkes, head of research at Sucden Financial, referring to purchasing managers’ data.

On the positive side, the US Treasury Secretary said the United States and China were working to conclude a trade deal while US job growth slowed less than expected in October.

Three-month copper on the London Metal Exchange (LME) rose 0.9% in final open-outcry trading to $5,850 a tonne.

It recovered after a 1.9% drop in the previous session, which was the biggest fall in almost three months due to the weak China data on Thursday. It is still heading for a weekly drop.

LME on-warrant zinc stocks hit a record low of 27,800 tonnes while the speculative net long in zinc marked the highest since mid-April, according to estimates by broker Marex Spectron. LME zinc gained 1.5% to finish at $2,520 a tonne.

The discount of cash LME aluminium to the three-month contract has declined to 75 cents a tonne, the lowest since January and compared with a discount of $33.25 in mid-September.

This indicates less availability of inventories in the LME system. LME aluminium climbed 1.8% to close at $1,786 after touching $1,790, the strongest since Sept. 23. It was the biggest one-day gain for nearly three months.

“We are cautious about chasing nickel near-term as the physical market is well supplied, the near-term outlook for stainless (steel) is weak and real demand support from EVs (electric vehicles) is unlikely over the next 12 months,” UBS analyst Daniel Major said in a note.

Nickel inventories in warehouses monitored by the LME, which have tumbled 58% over the past seven weeks, touched the lowest since December 2008.

LME nickel gained 0.8% to close at $16,775 a tonne, lead edged up 0.1% to $2,163, and tin was unchanged at $16,525.—Reuters