METALS-Copper, nickel fall as China data increase demand worries

Wed May 1, 2013 11:38am EDT

* Nickel hits lowest in 3-3/4 years after stocks rise to record
    * China manufacturing unexpectedly slows in April
    * Investors await Federal Reserve statement


    By Susan Thomas
    LONDON, May 1 (Reuters) - Copper slid on Wednesday, extending its deepest
monthly drop in almost a year in April, due to concerns over growth in top metal
consumer China and in the United States after data suggested the world's two
biggest economies remain fragile.
    Nickel touched its lowest level in nearly four years in broad-based selling
after data showed growth in Chinese manufacturing unexpectedly slowed last
month. Also LME nickel inventories climbed by 1,440 tonnes to a
new record of 178,476 tonnes, evidence of a market surplus.
    Nickel was down 3.1 percent at $14,910 a tonne after earlier
tumbling to a session low of $14,788 a tonne, the weakest since July 2009. 
    Three-month copper on the London Metal Exchange slid 3.4 percent to
$6,812.75 per tonne by 1518 GMT after touching a session low of $6,786.25, close
to the 18-month lows hit last week. Copper fell by more than 1 percent in the
previous session and lost 6.4 percent in April, the most since May 2012.
    By contrast European stock markets had the best April since 1997, and the
month marked the 11th straight monthly gain for the broad STOXX Europe 600 index
.
    "Equities tend to look further ahead, so I think to some extent it's an
expectation of where the world might be in a year's time," Standard Chartered
analyst Dan Smith said.
    "The problem is that China is looking quite poor, which has really weighed
on the whole base metals complex. Another problem for base metals is that Europe
still looks pretty abysmal."
    China's official purchasing managers' index (PMI) declined to 50.6 from
March's 11-month high of 50.9 as new export orders and input prices contracted.
 China accounts for 40 percent of global copper consumption and
Europe around 20 percent. 
    U.S. data showed companies hired the smallest number of employees in seven
months in April and manufacturing growth slowed, providing more signs that the
economy is encountering a soft patch. 
    The global copper market showed a 70,000 tonne surplus in January this year,
compared with a 60,000 tonne deficit in the same month last year, reflecting
lower demand for the metal, which is widely used in construction and power
cables. 
    
    
    U.S. FED, ECB IN FOCUS   
    On the LME, trade volumes were weak in Asian trading but picked up for
copper as it broke below the $7,000 a tonne mark and amounted to over 19,000
lots in the London afternoon.
    Most markets in Asia were closed on Wednesday, and many markets in Europe
including France and Germany were also shut for Labour Day holiday. The Shanghai
Futures Exchange will reopen on Thursday.
    Financial markets will focus later in the day on the outcome of a U.S.
Federal Reserve two-day policy meeting and on Thursday will look to the results
of a European Central Bank meeting.
    Fed members are widely expected to keep the current pace of bond buying at
$85 billion a month due to recent weak economic data. 
    In other metals, aluminium shed 2.0 percent to $1,833 a tonne, and  
lead fell 1.8 percent to $1,990.75 after hitting a six-month low of
$1,976. 
    Tin lost 1.8 percent to $19,999 a tonne and zinc fell 1.5
percent to $1,840.
 Metal Prices at 1518 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       307.75      -10.75     -3.38     365.25    -15.74
  LME Alum      1833.50      -65.50     -3.45    2073.00    -11.55
  LME Cu        6812.75     -242.25     -3.43    7931.00    -14.10
  LME Lead      1987.75      -39.25     -1.94    2330.00    -14.69
  LME Nickel   14837.00     -553.00     -3.59   17060.00    -13.03
  LME Tin      19905.00     -465.00     -2.28   23400.00    -14.94
  LME Zinc      1837.25      -30.75     -1.65    2080.00    -11.67
  SHFE Alu     14670.00       35.00     +0.24   15435.00     -4.96
  SHFE Cu*     51940.00      790.00     +1.54   57690.00     -9.97
  SHFE Zin     14745.00       75.00     +0.51   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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