METALS-Copper gains on upbeat China economic data

Fri Jan 18, 2013 12:20pm EST

* China GDP grows 7.9 percent in Q4
    * Worries over U.S. debt ceiling persist
    * U.S. consumer sentiment hits year low in January

    By Maytaal Angel
    LONDON, Jan 18 (Reuters) - Copper rose on Friday and was on
track to close the week with small gains, bolstered by
better-than-expected fourth quarter growth in top consumer
China's economy, but concerns about U.S. debt and supply
surpluses kept gains in check.
    China's economy grew at a slightly faster-than-expected 7.9
percent in the fourth quarter of 2012, the latest sign it is
pulling out of a post-global financial crisis slowdown that
produced its weakest year of economic growth since 1999.
 
    Other data released alongside gross domestic product showed
industrial output grew 10.3 percent in December from a year ago,
versus expectations of 10.1 percent. Retail sales in December
rose 15.2 percent on a year ago versus an estimated 14.9 percent
in a Reuters poll.
    Three-month copper on the London Metal Exchange 
closed at $8,061 a tonne from $8,054 on Thursday.
    "The two key points for 2013 are the seasonal restocking in
China (which) kicks off after the Chinese New Year - that will
likely support prices above $8,000 a tonne in the first
quarter," said UBS commodity and mining analyst Angus Staines.
    "But after that we're going to see a return to fundamentals
and for copper that means an oversupplied market."
    The China data out earlier followed more evidence on
Thursday that the U.S. economy remained on track, with weekly
U.S. unemployment claims at five year-lows and a surge in
residential construction in December. 
    But worries about U.S. debt persist, with squabbling in
Washington raising the chances that the U.S. may be forced to
delay debt payments. The treasury hit its $16.4 trillion debt
ceiling on New Year's Eve, and will run short of funds as early
as mid-February. 
    U.S. consumer sentiment unexpectedly deteriorated for a
second straight month to its lowest in over a year in January,
with many consumers citing the recent debt-ceiling debate in
Washington.      
    Also keeping copper's gains in check, stocks of the metal
monitored by the Shanghai Futures Exchange inched down 0.3
percent from last week to 208,568 tonnes, but remained near
their highest since April last year. 
    Stocks of copper in warehouses monitored by the LME are also
near their highest levels in about a year, latest data showed. 
        
    SPUTTERING
    Copper hit 2-1/2 month highs in early January, but has since
struggled to regain momentum.
    "The macro picture both out of the United States and China
look good for metals," said analyst Ed Meir of INTL FC Stone in
New York.
    "Still, as we get into February, the focus will then revert
to what is going on in the United States. If they don't raise
the debt ceiling it's going to be a mess. Expect more of the
same - (copper prices) muddling along," he added.
    In the physical markets, traders in Asia said business was
quiet ahead of the Lunar New Year holiday next month.
    LME nickel, the worst performing metal in the
complex last year, closed at $17,550 from $17,600. LME stocks of
the metal edged up another 576 tonnes to 147,804 tonnes, near
the highest levels in almost three years. 
    Tin closed at $25,025 a tonne from $24,920, zinc
 at $2,034 a tonne from $2,010, lead at $2,301
from $2,285 and aluminium at $2,044 from $2,048.50.
    
 Metal Prices at 1704 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2012   Ytd Pct
                                                              move
  COMEX Cu       366.15        0.80     +0.22     365.25      0.25
  LME Alum      2046.25       -2.25     -0.11    2073.00     -1.29
  LME Cu        8071.25       17.25     +0.21    7931.00      1.77
  LME Lead      2301.50       16.50     +0.72    2330.00     -1.22
  LME Nickel   17552.00      -48.00     -0.27   17060.00      2.88
  LME Tin      24895.00      -25.00     -0.10   23400.00      6.39
  LME Zinc      2033.50       23.50     +1.17    2080.00     -2.24
  SHFE Alu     15285.00       45.00     +0.30   15435.00     -0.97
  SHFE Cu*     58380.00      640.00     +1.11   57690.00      1.20
  SHFE Zin     15420.00      155.00     +1.02   15625.00     -1.31
 ** 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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