METALS-Copper up on weaker dollar, U.S. housing data

Tue Apr 16, 2013 12:30pm EDT

* Copper rebounds, still 8 pct lower year-to-date
    * U.S. March house starts rise 7 percent, beat expectations

    By Harpreet Bhal and Silvia Antonioli
    LONDON, April 16  (Reuters) - Copper rose on Tuesday helped by a weaker
dollar and as upbeat housing data from the U.S. propped up hopes of more
solid metals demand growth, prompting some buying after a sharp fall in the
previous session. 
    Three-month copper on the London Metal Exchange rose by 1.15
percent to close at $7,285 a tonne, from Monday's close of $7,202, when the
metal fell to its lowest for 1-1/2 years.    
    Commodity markets slumped on Monday after data showed China's economic
recovery unexpectedly stumbled in the first three months of 2013.
 
    Risk sentiment also turned more positive on Tuesday thanks to data
showing that ground-breaking to build new U.S. homes rose in March to the
highest level since June 2008, adding to evidence of a healthier housing
market, which uses copper in construction. 
    "The housing data was good, it shows the U.S. recovery is
consolidating," T-Commodity consultant Gianclaudio Torlizzi said. "From a
long-term perspective the current copper price is exceptionally good for
buyers but in the short term things might be a bit shaky."
    Economic growth in top metals consumer China has underwhelmed so far
this year but fundamentals for copper have improved slightly from a few
weeks ago, analysts said.        
    "Physical premiums for copper in Shanghai and falling stockpiles are
indicators that things are getting better," said Nic Brown, head of
commodity research at Natixis. 
    Copper stocks in bonded warehouses in Shanghai have fallen by about a
fifth in the past month fanning hopes that Chinese importers will resume
fresh orders soon. 
    "We don't think end user demand is that bad at the moment. We could
expect that as growth finally does pick up later in the year (in China)
that we will see stronger prices for base metals," Brown said. 
    China is the world's biggest copper consumer, accounting for about 40
percent of global demand.
    A weaker dollar against a basket of currencies also supported copper
prices. 
    A softer U.S. unit makes dollar-priced commodities such as metals
cheaper for holders of other currencies.
    Copper is down about 8 percent from the end of last year. 
    
     
    
    BUYING ON DIPS 
    Traders said consumers would start purchasing on dips below $7,100 a
tonne, while Chinese buyers have shown modest interest.
    "After weakness initially, we have seen short-covering through $7,185
and $7,230. We are now looking at the $7,280 area for a break or
pull-back," said a trader in Hong Kong.
    Reflecting a market in plentiful supply, little price support came from
news that Rio Tinto's Kennecott copper mine in Utah, the
second-biggest source of copper in the United States, would see a drop in
refined metal output of about 100,000 after a cave-in last Wednesday.
 
    Other metals also recovered from multi-month lows hit in the previous
session. Soldering metal tin closed at $21,120 from $21,050 on
Monday while zinc, used in galvanising, ended at $1,896 from
$1,869. 
    Battery material lead closed at $2,065 from $2,033, aluminium
 at $1,914 from $1,866, and stainless steel ingredient nickel
 at $15,705 from $15,695. 
    
    
 Metal Prices at 1620 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       329.45        2.15     +0.66     365.25     -9.80
  LME Alum      1914.25       48.25     +2.59    2073.00     -7.66
  LME Cu        7295.00       93.00     +1.29    7931.00     -8.02
  LME Lead      2070.00       37.00     +1.82    2330.00    -11.16
  LME Nickel   15745.00       50.00     +0.32   17060.00     -7.71
  LME Tin      21120.00       70.00     +0.33   23400.00     -9.74
  LME Zinc      1900.75       31.75     +1.70    2080.00     -8.62
  SHFE Alu     14595.00       20.00     +0.14   15435.00     -5.44
  SHFE Cu*     53030.00     -690.00     -1.28   57690.00     -8.08
  SHFE Zin     14580.00       75.00     +0.52   15625.00     -6.69
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07