METALS-Copper rises on Japan easing move, dollar

Tue Jan 22, 2013 12:28pm EST

* BOJ doubles inflation target, adopts open-ended asset
buying
    * China December copper production up over 20 pct to 580,000
T
    * U.S. home sales drop in December; German sentiment survey
strong

    By Susan Thomas
    LONDON, Jan 22 (Reuters) - - Copper rose to its highest
level in more than a week on Tuesday, following other
commodities markets and equities higher after Japan's central
bank promised unlimited asset buying to boost economic growth.
     The Bank of Japan, which has been under intense political
pressure to overcome deflation, raised its inflation target to 2
percent and said that from 2014 it would adopt an open-ended
commitment to buy assets. 
    Three-month copper on the London Metal Exchange,
ended up 0.97 percent to $8,133 a tonne, up from $8,055 at the
close on Monday. It earlier hit $8,135 a tonne, its highest
since Jan. 11. 
    "The main driver today is the announcement out of Japan,"
T-Commodity metals consultant Gianclaudio Torlizzi said.
    "In the medium and the long term it represents a bullish
driver for base metals, because the Bank of Japan and the
Federal Reserve are two of the main central banks which will
continue to inject a lot of liquidity into the financial
markets."
    An unexpectedly strong survey of German sentiment, showing
analyst and investor morale at its highest since May 2010, also
helped metals. 
    There was in addition confidence in the steadiness of top
metals consumer China's economic recovery, although metals
buyers were wary over whether the Chinese will stock up before
the week-long Lunar New Year holiday in mid-February.
    "We still have to wait and see whether there is restocking
ahead of Chinese New Year - the spot market remains the same for
now. Demand might pick up at the end of the first quarter
because of seasonality," said Chunlan Li, a Beijing-based copper
analyst with consultancy CRU.
    Copper stocks in China's bonded warehouses hit a record high
of over 1 million tonnes in November, and its refined copper
output climbed more than 20 percent in December to a record
580,000 tonnes.
    The rising stockpiles and production could dampen China's
appetite for spot imports and 2013 term shipments and are likely
to weigh on benchmark LME copper prices. 
    Also holding back copper's gains, European and U.S. shares,
seen as a proxy for growth, fell as investors awaited a batch of
corporate earnings. They were largely unmoved, however, by a
surprise drop in U.S. home sales in December. 
    On the plus-side, a softer dollar versus a basket of
currencies, and against the yen, supported base metals. A weaker
dollar makes metals priced in the U.S. currency cheaper for
holders of alternative currencies. 
    
    
    ALUMINIUM
    China's aluminium production rose almost 24 percent in
December. The country is the world's top producer of the metal.
    Three-month aluminium closed up 1.69 percent to
$2,075 per tonne from a last bid of $2,040.50 on Monday. Lead
ended up 1.09 percent at $2,325 a tonne, and nickel 
closed up 0.03 percent to $17,385 a tonne. 
    LME zinc closed up 1.06 percent at $2,053 per tonne,
having earlier hit a two week high of $2,062.50 a tonne. Tin
, the best performer on the LME last year, ended down
1.50 percent at $24,625 a tonne from $25,000.
    "Tin (is) struggling to hold above $25,000. A 600 tonne
increase in on-warrant (LME stocks) stocks this morning has
added to the sense that prices are indeed consolidating for the
time being," said Standard Bank in a note.
 Metal Prices at 1718 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       368.80        1.85     +0.50     365.25      0.97
  LME Alum      2072.00       28.00     +1.37    2073.00     -0.05
  LME Cu        8127.00       72.00     +0.89    7931.00      2.47
  LME Lead      2330.25       29.25     +1.27    2330.00      0.01
  LME Nickel   17432.00       52.00     +0.30   17060.00      2.18
  LME Tin      24726.00     -299.00     -1.19   23400.00      5.67
  LME Zinc      2060.25       28.75     +1.42    2080.00     -0.95
  SHFE Alu     15265.00       10.00     +0.07   15435.00     -1.10
  SHFE Cu*     58690.00      500.00     +0.86   57690.00      1.73
  SHFE Zin     15485.00      120.00     +0.78   15625.00     -0.90
 ** 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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