METALS-Copper rebounds over $7,000 but capped by economy worries

Wed Apr 24, 2013 12:22pm EDT

* LME nickel stocks rise to fresh record high
    * Norsk Hydro results top forecasts, sees rising demand
    * U.S. durable goods orders post biggest drop in seven months


    By Harpreet Bhal and Eric Onstad
    LONDON, April 24 (Reuters) - Copper surged above $7,000 a tonne on Wednesday
as investors went bargain-hunting following hefty falls, but further gains were
capped by uncertainty about the outlook for global economic growth.
    Three-month copper on the London Metal Exchange (LME) closed 2.3
percent higher at $7,029.50 a tonne, after earlier hitting a session peak of
$7,053, its highest since late last week. It had reached an 18-month low of
$6,762.25 a tonne on Tuesday. 
    The metal used in power and construction fell 5.6 percent last week and has
shed 16 percent since touching $8,346 in February, its highest in 2013. 
    "The bounce today is a reaction to the fact that markets got oversold from
the last few days. Sentiment got a bit too bearish due to weak data from China
and Europe," said Robin Bhar, an analyst at Societe Generale. 
    "These lower prices are attracting good physical buying. There seems to be
good physical demand at these levels, and that is allowing a floor to be
established at the 7,000 level." 
    While a drop in momentum in major North American, European and Asian
economies capped prices, expectations that this would lead to more quantitative
easing measures from global central banks curbed selling pressure on riskier
assets such as metals. 
    German business sentiment fell in April for a second consecutive month,
missing even the lowest estimate in a Reuters poll, but the data helped
reinforce expectations that the European Central Bank might cuts rates at a
meeting next week. 
    Worries deepened that a recovery in the global economy was stalling after
data showed orders for long-lasting U.S. manufactured goods recorded their
biggest drop in seven months in March. 
    "Weak economic data is not positive for demand, but at the same time you
could get central bank support and that puts a floor on price falls for
commodities," Bhar said.   
     
    
    NICKEL TO TRIM SURPLUS
    In other metals, stainless-steel ingredient nickel closed 0.9
percent firmer at $15,270 a tonne, rebounding from an intra-day low of $15,075,
the weakest since July 2009.  
    The global nickel market will slightly cut its surplus to 90,000 tonnes in
2013, down from a 110,000 tonne surplus in 2012, the International Nickel Study
Group said on Wednesday. 
    Evidence of the market surplus once again showed up in LME nickel stocks , which rose to a record 175,860 tonnes, the fourth record high in
a row.
     "Although we cannot rule out another bout of weakness, especially if there
is a broad-based risk-reduction sell-off across markets, we feel nickel prices
would be unlikely to stay below $15,500 for long," Sucden Financial said in a
report.
    "As is often the case with nickel demand, prices can react sharply at first
when the stainless steel industry is in restocking mode. This may well be the
case at some stage during the second quarter."
    The low prices appeared to be hitting miners after Russia's Norilsk Nickel
 , the world's largest nickel producer, said it might suspend
operations at its Tati Nickel mine in Botswana after prices dropped.
 
    Aluminium ended 0.8 percent higher at $1,911 a tonne, extending its
recovery since touching a 3-1/2-year low of $1,818 on April 15.
    Norsk Hydro, one of the world's biggest aluminium makers, beat
first-quarter earnings forecasts due to higher prices, sales and cost-cutting
and predicted demand for the metal would return to levels that match supply this
year. 
    Battery material lead ended 1.5 percent higher at $2,045 a tonne,
while soldering metal tin climbed 1.7 percent to $20,900 and zinc
 added 2.1 percent to $1,919.
    LME zinc stocks fell on Wednesday by 6,050 tonnes to 1.09
million tonnes, bringing to about 100,000 tonnes the decline in the past month.
   
 Metal Prices at 1611 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       317.20        7.90     +2.55     365.25    -13.16
  LME Alum      1909.00       13.50     +0.71    2073.00     -7.91
  LME Cu        7016.00      146.00     +2.13    7931.00    -11.54
  LME Lead      2045.00       30.00     +1.49    2330.00    -12.23
  LME Nickel   15250.00      120.00     +0.79   17060.00    -10.61
  LME Tin      20802.00      242.00     +1.18   23400.00    -11.10
  LME Zinc      1915.50       36.50     +1.94    2080.00     -7.91
  SHFE Alu     14620.00       60.00     +0.41   15435.00     -5.28
  SHFE Cu*     50810.00     1360.00     +2.75   57690.00    -11.93
  SHFE Zin     14610.00      115.00     +0.79   15625.00     -6.50
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.