METALS-Copper drops on growth worries, ample supply

Fri Apr 12, 2013 1:17pm EDT

* Copper nears 8-month lows
    * Operations suspended at Rio Tinto mine in Utah after landslide
    * LME copper stocks at highest in more than a decade

    By Harpreet Bhal and Silvia Antonioli
    LONDON, April 12 (Reuters) - Copper fell 3 percent on Friday as concern
about slowing economic growth raised uncertainty over the base metals demand
outlook while abundant supply and inventories of the metal put further pressure
on prices.
    Three-month copper on the London Metal Exchange closed at $7,406.50,
down from Thursday's close of $7,610 a tonne. Earlier the metal hit a session
low of $7,375, not far from eight-month lows of $7,331.25 hit on April 4.
    "Data out of China has been as expected and in some cases slightly better.
But it doesn't show an economy that is really taking off and the government
doesn't want the economy to move ahead too rapidly," said Robin Bhar, analyst at
Societe Generale. 
    "People are doubting the commodity supercycle as they are seeing markets
much better supplied than they were in the past. The facts tell us it's a pretty
soft picture out there." 
    Underpinning perceptions of abundant supply, copper stocks in LME-registered
warehouses rose by 3,475 tonnes to 593,650 tonnes, their highest
in over a decade.
    Reuters polls suggested this year now looks unlikely to deliver much
improvement in the world economy's growth rate, with a weaker outlook for Europe
and the United States tempering the cautious optimism evident in January.
 
   "Copper has been turning bearish with weak macro numbers from the U.S. and
generally a very slow pick up in China," VTB Capital analyst Andrey Kryuchenkov
said. "It is a broader commodity markrt sell off, due to macro tidings turning
negative, but for 3-month copper it should stop near $7,300."
    News that mining operations were suspended at Rio Tinto's Bingham
Canyon in Utah, after a landslide on Wednesday, failed to lift copper prices.
     A company spokesman could not say how long the smelting and refining
process could continue to produce copper.   
    "Bingham Canyon's pit wall failure may temper the ongoing lift in global
inventories; market will still probably loosen through 2014, weighing on
copper's price," UBS said in a research note.
 
       
    
    STERLITE SHUT
    India's largest copper smelter, run by Sterlite Industries Ltd,
will not start commercial production until at least April 29, when a court will
again consider a request to reopen the plant, shut over complaints of emissions.
 
    The closure has already pushed up premiums to get metal in Asia while
shipments of concentrate that are not needed due to the shutdown have been
re-routed to China, helping the country boost its second-quarter output and
curbing its demand for refined metal. 
    In other metals, aluminium closed at $1,852 a tonne from $1,898 on
Thursday while zinc finished at $1,874 from $1,914. 
    Tin closed at $22,005 from $22,860, nickel at $15,850 from
$15,880 and lead at $2,049 from $2,085. 
    
 Metal Prices at 1656 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       335.05       -8.30     -2.42     365.25     -8.27
  LME Alum      1857.25      -40.75     -2.15    2073.00    -10.41
  LME Cu        7423.00     -187.00     -2.46    7931.00     -6.41
  LME Lead      2041.00      -44.00     -2.11    2330.00    -12.40
  LME Nickel   15858.00     -412.00     -2.53   17060.00     -7.05
  LME Tin      21950.00     -910.00     -3.98   23400.00     -6.20
  LME Zinc      1868.75      -45.25     -2.36    2080.00    -10.16
  SHFE Alu     14715.00      -15.00     -0.10   15435.00     -4.66
  SHFE Cu*     55220.00       80.00     +0.15   57690.00     -4.28
  SHFE Zin     14745.00      -40.00     -0.27   15625.00     -5.63
 ** 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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