CORRECTED-METALS-Macro-economic fears keep copper pinned below $8,000
* Copper hits 3-month low as global growth concerns weigh * Spanish bond yields above 6 pct affect wider markets * Sharp pullback in spec net long copper positions-CFTC * Coming up: U.S. March industrial output data Tuesday By Chris Kelly and Veronica Brown NEW YORK/LONDON, April 16 (Reuters) - Copper touched a three-month low under $8,000 a tonne for the second straight day on Monday, pressured by diminishing second-quarter demand prospects linked to slowing economic growth in top consumer China and Europe's festering debt crisis. Copper fell in sympathy with other riskier assets like crude oil and the euro after an acknowledgement by Spain that it probably has tipped into its second recession since 2009 escalated concerns about global demand for raw materials, already in doubt from a slowdown in China. "The market's a bit heavy here ... lower demand from China and Europe a big question mark, I don't see anyone having a big desire to move into copper at this point," said Sterling Smith, an analyst for Country Hedging Inc in St. Paul, Minnesota. "The situation in Spain is much closer to a depression given the unemployment rate in excess of 20 percent. This could set off another Greece-like situation." He expected the bearish mood to keep prices on a bearish course in the near-term, with further liquidation pressures potentially taking prices down toward the $3.20 ($7,050 a tonne) area before support comes in. London Metal Exchange (LME) three-month copper fell $10 to end at $7,980 a tonne, recovering a bit from an earlier plunge to a three-month low of $7,885.25. In New York, the COMEX May contract eked out a 10-cent gain to settle at $3.6280 per lb, after dealing from its own three-month low at $3.5690 to $3.6345. COMEX copper volumes stood above 76,000 lots in late New York trade, more than 20 percent above the 30-day norm, but below last week's elevated pace that saw volumes hit a record 127,276 contracts on Tuesday. Copper managed to bounce off of its worst levels Monday after data showed U.S. retail sales had risen more than expected in March. But a separate report from the New York Federal Reserve showed the pace of manufacturing growth in New York state slowed sharply in April to its lowest level in five months. "Mixed U.S. data is not going to give the bulls a big enough hook to hang their horns on, which will probably lead to lower prices," Country Hedging's Smith said. Reflecting this view was the latest data from the Commodity Futures Trading Commission (CFTC) which showed a sharp retreat in the net long COMEX copper positions. Money managers, including hedge funds and other large speculators, cut 15,687 contracts during the week of April 10, to bring the net long position to 2,955 contracts -- the lowest level since the week of Sept. 18, when they were net long on 300 contracts, the data showed. Further cuts in the net long copper position were likely after data on Friday showed the Chinese economy grew at its slowest clip in nearly three years. "We have the China slowdown fears and now the flare-out in Spanish yields, and that has put pressure on the euro, so that's a dampener on sentiment," Societe Generale analyst Robin Bhar said. On the supply side, Chile's copper production is expected to grow by more than 6 percent this year, the country's mining minister said on Monday, recovering from a 3-percent fall in 2011. Mining group Anglo American sees its copper output jumping this year as its disputed Los Bronces mine in Chile gears up, while a chronically under supplied and volatile market will briefly tilt into surplus next year, chief executive John MacKenzie told Reuters. EURO ZONE FEARS In February, copper was up nearly 15 percent for the year when it hit a high of $8,765 a tonne as investors bet on firm Chinese demand and tight global supplies. That year-to-date gain thinned to less than 4 percent on Monday. Spain's banks increased their reliance on cheap loans from the European Central Bank in March, borrowing almost double what they did in February. Uncertainty over the euro zone and wider global economy and the issue of Chinese demand are expected to keep copper prices soft this year, although analysts are slightly more optimistic than they were in January, a Reuters poll showed on Friday. The average forecast of 37 analysts in the survey, carried out in recent weeks, called for cash prices for the metal used in power and construction to average $8,445 a tonne in 2012, rising to $8,818 in 2013. Metal Prices at 1745 GMT Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 363.70 1.00 +0.28 343.60 5.85 LME Alum 2064.00 -16.00 -0.77 2020.00 2.18 LME Cu 7984.00 -6.00 -0.08 7600.00 5.05 LME Lead 2077.00 12.00 +0.58 2035.00 2.06 LME Nickel 17500.00 -805.00 -4.40 18710.00 -6.47 LME Tin 21400.00 -805.00 -3.63 19200.00 11.46 LME Zinc 1995.00 11.00 +0.55 1845.00 8.13 SHFE Alu 16050.00 -110.00 -0.68 15845.00 1.29 SHFE Cu* 56720.00 -1310.00 -2.26 55360.00 2.46 SHFE Zin 15345.00 -220.00 -1.41 14795.00 3.72 ** 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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