METALS-Copper falls to fresh 1-1/2 year low on weak China data

Tue Apr 23, 2013 12:42pm EDT

* China's HSBC flash PMI eases
    * Reuters poll shows cash copper seen at $7,900/T in '13
    * Data suggest recovery in U.S. housing market still on track

    By Harpreet Bhal and Silvia Antonioli
    LONDON, April 23 (Reuters) - Copper fell to a fresh 18-month low on Tuesday
as disappointing economic data from top metals consumer China reinforced
concerns over prospects for demand.
    Three-month copper on the London Metal Exchange (LME) closed at
$6,870 a tonne, down about 1 percent from a close of $6,935 a tonne on Monday.
It earlier dropped to $6,762.25 a tonne, its lowest level since October 2011. 
    Growth in China's factory sector dipped in April as new export orders
shrank, a preliminary survey of factory managers showed, suggesting the world's
second-largest economy still faces formidable global headwinds into the second
quarter. 
    The flash HSBC Purchasing Managers' Index for April fell to 50.5 in April
from 51.6 in March but was still stronger than February's reading of 50.4.
China's official PMI is due May 1.
    China is the world's top copper consumer, accounting for around 40 percent
of global refined demand.
    "People pay attention to this Chinese data, and it confirmed something that
we knew already, that momentum has slowed down a little bit and the market is
already in a pretty bearish mode," analyst Andrey Kryuchenkov at VTB Capital in
London said.
    Adding to concerns, data showed Germany's private sector shrank for the
first time in five months in April, suggesting Europe's largest economy may
contract again after an expected recovery in the first quarter. 
    The metal used in power and construction is down more than 13 percent so far
this year.
    Analysts slashed their copper price forecasts for this year and next to
levels below the 2012 average as the metal came under increased pressure from a
weak outlook for demand and a surge in new supply, a Reuters poll showed.
    The 31 market participants surveyed in the three weeks to April 22 expected
cash copper prices to average $7,900 a tonne in 2013, down 0.7 percent
from a 2012 average of $7,958.30 and lower still compared with a forecast of
$8,119 in a January poll. 
    A rise in the dollar also put pressure on metals prices. A strong dollar
makes commodities priced in the U.S. unit more expensive for holders of other
currencies. 
    Copper was little changed after data showed sales of new U.S. single-family
homes rose in March, indicating the housing market recovery remains on track. 
    "The U.S. data is supportive for copper, but China is more important at this
time. The Chinese news was disappointing and copper was sold off on the back of
that," Kryuchenkov said.
     
    
    ZINC PRESSURED 
    LME zinc prices have failed to gather any upward momentum since
falling to a 5-1/2-month low at $1,825 mid-month.
    "The problem for zinc is the same as that afflicting other base metals:
current market fundamentals and macroeconomic forecasts are simply not strong
enough to encourage forward buying," broker Triland said in a note.
    Zinc, used to galvanize steel, closed at $1,879, down from a close of $1,882
on Monday.
    Battery material lead ended at $2,015 from $2,010, while soldering
metal tin finished at $20,560 from a last bid of $20,795 on Monday. 
    Stainless-steel ingredient nickel closed at $15,130 from $15,300,
and aluminium at $1,895.50 from a last bid of $1,892 a tonne. 
    Trafigura, the world's third-biggest trader in raw materials, reported a 3.2
percent rise in first-quarter net profit to $216.1 million, compared with the
same quarter a year earlier, according to a filing on the Singapore Exchange.
    
 Metal Prices at 1632 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       310.25       -2.85     -0.91     365.25    -15.06
  LME Alum      1892.50        5.50     +0.29    2073.00     -8.71
  LME Cu        6858.25      -76.75     -1.11    7931.00    -13.53
  LME Lead      2015.25        5.25     +0.26    2330.00    -13.51
  LME Nickel   15129.00     -171.00     -1.12   17060.00    -11.32
  LME Tin      20550.00     -250.00     -1.20   23400.00    -12.18
  LME Zinc      1876.25       -5.75     -0.31    2080.00     -9.80
  SHFE Alu     14580.00       20.00     +0.14   15435.00     -5.54
  SHFE Cu*     49350.00     -610.00     -1.22   57690.00    -14.46
  SHFE Zin     14515.00      -30.00     -0.21   15625.00     -7.10
 ** 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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