METALS-Copper up after U.S. data, supply outlook weighs

Mon Jan 28, 2013 12:18pm EST

* U.S. durable goods orders up 4.6 pct in December
    * China economy could grow 8 pct in 2013 -sovereign wealth
fund
    * Investors add bullish bets on copper but not many -CFTC

    By Maytaal Angel and Harpreet Bhal
    LONDON, Jan 28 (Reuters) - Copper edged higher on Monday
after better-than-expected U.S. durable goods data lifted
confidence about growth and demand in the world's largest
economy, but uneasiness about the growth of supply kept prices
in check.
    Three-month copper on the London Metal Exchange 
ended at $8,050 a tonne, up from Friday's close of $8,030 a
tonne.
    Copper prices hit intraday highs after data showed that U.S.
durable goods orders rose 4.6 pct in December, surpassing
expectations for a 1.8 percent gain. 
    Analysts said the market was likely to keep a close eye on
U.S. economic data, including non-farm payroll numbers on
Friday, a Federal Reserve meeting on Tuesday and political
developments surrounding the U.S. budget, before investing more
money in industrial metals.
    "This (durable goods data) is a good number, no doubt, but
people are on the sidelines. Investors are still guarded and
there is uncertainty about how much growth we are going to see,
and we also still have the key budget negotiations ahead," said
Edward Meir, an analyst at INTL FCStone. 
    Hedge funds and money managers increased the size of their
net longs in futures and options of gold, silver and copper last
week on signs of continued improvement in the U.S. economy,
Commodity Futures Trading Commission data showed on Friday.
    But copper length increased by a relatively small net 270
contracts to 16,438 contracts, evidence of slim investor
conviction.
    Weighing on the outlook for copper prices were expectations
that large quantities of supply could enter the market this
year. 
    Top copper producer Chile is seen producing 5.596 million
tonnes of copper this year, up 3 percent from 2012 levels, as
heavy mining investment pays off, the country's state copper
commission Cochilco said on Monday. 
    A Reuters poll last week showed analysts expect new supply
to push the market into a surplus of 120,000 tonnes in 2013.
 
    "Generally, data this year have been positive through the
key regions China, the U.S. and Europe, but copper will start
underperforming this year, reflecting the idea that the market
is on the cusp of moving from deficit to surplus," BNP Paribas
analyst Stephen Briggs said.

    CHINA ECONOMY  
    Also helping cement copper's gains, the head of China's
sovereign wealth fund said on Saturday the Chinese economy,
which grew at 7.9 percent in the fourth quarter, could pick up
the pace to more than 8 percent in 2013.
    China accounts for 40 percent of refined copper consumption.
    Also on the data calendar is China's official purchasing
manager's index (PMI) and HSBC's final PMI for January, which
are expected to show an uptick in activity in the world's No.2
economy.
    "Generally the consensus is that China's manufacturing
sector should continue to show improvement. We're expecting a
heavy volume of indicators towards the end of the week," Credit
Suisse analyst Ivan Szpakowski said.
    Chinese buying has remained subdued ahead of the Lunar New
Year holiday. China's markets will be closed from Feb. 11 to
Feb. 15.
    In other trades, soldering metal tin ended at
$24,400 from Friday's close of $24,700, while zinc, used
in galvanizing, closed at $2,081 from $2,080.
    Battery material lead ended at $2,378 from $2,355,
aluminium closed at $2,050 from $2,046, while
stainless-steel ingredient nickel ended at $17,625 from
a last bid of $17,380.
    
 Metal Prices at 1702 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       365.30        1.05     +0.29     365.25      0.01
  LME Alum      2043.25       -2.75     -0.13    2073.00     -1.44
  LME Cu        8051.50       21.50     +0.27    7931.00      1.52
  LME Lead      2376.50       21.50     +0.91    2330.00      2.00
  LME Nickel   17601.00      211.00     +1.21   17060.00      3.17
  LME Tin      24350.00     -350.00     -1.42   23400.00      4.06
  LME Zinc      2080.00        0.00     +0.00    2080.00      0.00
  SHFE Alu     15165.00      -60.00     -0.39   15435.00     -1.75
  SHFE Cu*     58450.00     -180.00     -0.31   57690.00      1.32
  SHFE Zin     15570.00      -10.00     -0.06   15625.00     -0.35
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