Industrial metal prices rallied Wednesday after a report that manufacturing grew in January, offering some hope that companies may need more raw materials in the months ahead.
U.S. factory production grew at the fastest pace in seven months, according to the Institute of Supply Management, a trade group of purchasing managers. Its manufacturing index increased to 54.1 from 53.1 in December.
New orders and order backlogs hit nine-month highs. That suggests production could rise. Separately, the Commerce Department said construction spending rose 1.5 percent in December, the fifth straight monthly gain.
A Chinese manufacturing index rose in December, and a manufacturing index for European countries that use the euro improved in in January for the second straight month, according to Markit Economics.
CPM Group analyst Carlos Sanchez said the industrial metals, such as copper, platinum and palladium, have had a strong rally this year. He attributed it to signs of an improving U.S. economy and a weaker dollar. Because commodities are priced in dollars, a weaker dollar makes them cheaper for buyers who use other currencies.
The three metals are used to produce products from buildings and electronics to catalytic converters.
In March contracts, copper rose 5.2 cents to finish at $3.842 per pound, palladium rose $10.35 to $696.70 per ounce, and silver increased 54.5 cents to $33.807 per ounce. April platinum ended up $35.10 at $1,623.20 per ounce and February gold increased $9.10 to $1,749.50 an ounce.
In other trading, wheat prices rose on speculation that cold weather damaged winter wheat crops in the Black Sea region of Russia and the Ukraine, analysts said.
Wheat for March delivery increased 8.25 cents to $6.7425 per bushel. March corn rose 3 cents to $6.42 per bushel and March soybeans ended up 16.25 cents at $12.1525 per bushel.
Natural gas plunged nearly 5 percent after some energy companies decided against making production cuts despite bulging inventories. Natural gas ended down 12.1 cents at $2.382 per 1,000 cubic feet on the New York Mercantile Exchange.
Benchmark oil fell 87 cents to finish at $97.61 per barrel, heating oil fell 0.54 cent to $3.0455 per gallon and gasoline futures rose 0.13 cent to $2.8922 per gallon.
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AP Economics Writer Christopher S. Rugaber contributed to this report.
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