CORRECTED-METALS-Chinese trade data drains copper market sentiment
* Imports and inventories help bolster copper * Energy intensive aluminium output may be limited * Coming up: U.S. trade and weekly jobs data at 1230 GMT By Pratima Desai LONDON, Oct 13 (Reuters) - Copper prices sagged on Thursday after soft Chinese trade data reinforced a gloomy outlook for global economic growth, but signs of stronger industrial metals demand from the country helped limit losses. Benchmark copper on the London Metal Exchange was trading at $7,422 a tonne at 0916 GMT from $7,529 at the close on Wednesday when the metal used in power and construction hit a two-week high of $7,544.75 a tonne. China's trade surplus narrowed in September, as both imports and exports were lower than expected, reflecting global economic weakness and domestic cooling that will deepen policy quandaries facing Beijing. "The fact that the trade surplus is down for the second month running is raising questions about whether China can decouple from the G3 (United States, Japan and Germany)," said Robin Bhar, analyst at Credit Agricole. "That is putting pressure on commodities and copper in particular." China is the world's largest copper consumer accounting for nearly 40 percent of global demand estimated this year at around 20 million tonnes. Traders said industrial metals markets will be closely watching Chinese inflation data due on Friday for clues to the future direction of monetary policy, which has been on a tightening trajectory since last year. That has been a major reason behind the 30 percent fall in copper prices since a record high of $10,190 a tonne on Feb 15. Also on the agenda for next week is industrial production data from China, a key indicator of metals demand. CAUTION WARRANTED On the plus side however, traders cite Chinese imports of copper which rose 11.8 percent in September to a 16-month high and expectations that the trend could continue for the rest of this year if prices stay around current levels. "The euro zone issue is still there, there is a lot of uncertainty, but it looks better than it did and the stocks data is also more positive," a copper trader said. Stocks of copper in LME approved warehouses have fallen to 453,100 tonnes, down nearly five percent since the start of October. Even more positive is the amount of copper -- 32,725 tonnes -- waiting to leave warehouses in South Korea for destinations in China, traders said. Financial and commodity markets are watching Italy, set to test fragile investor confidence in the euro zone's ability to heal its debt problems, with a sale of bonds. "Some caution is warranted in the near-term as there is still room for disappointment in the euro zone with regards to its debt problems," Credit Suisse said in a note. "Energy intensive Chinese aluminum output growth may remain constrained into the fourth quarter as power supplies have remained tight, according to grid operators." China is the world's largest producer and consumer of aluminium used in power, transport and packaging. Three-month aluminium was at $2,229 a tonne from $2,248 on Wednesday, zinc at $1,934 from $1,945 and lead at $2,032 from $2,070. Tin was trading at $22,590 a tonne from $23,000 and nickel at $18,945 from $19,080. Metal Prices at 0915 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 334.10 -4.95 -1.46 444.70 -24.87 LME Alum 2227.25 -20.75 -0.92 2470.00 -9.83 LME Cu 7441.75 -87.25 -1.16 9600.00 -22.48 LME Lead 2034.00 -36.00 -1.74 2550.00 -20.24 LME Nickel 18950.00 -130.00 -0.68 24750.00 -23.43 LME Tin 22400.00 -600.00 -2.61 26900.00 -16.73 LME Zinc 1935.50 -9.50 -0.49 2454.00 -21.13 SHFE Alu 16660.00 -85.00 -0.51 16840.00 -1.07 SHFE Cu* 54880.00 -50.00 -0.09 71850.00 -23.62 SHFE Zin 15160.00 -45.00 -0.30 19475.00 -22.16 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
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