METALS-Copper slips, taking breather after 3-week high

Thu May 9, 2013 12:16pm EDT

* Rio ahead of schedule on Mongolian copper exports
    * Chinese consumers inflation rises

    By Silvia Antonioli and Harpreet Bhal
    LONDON, May 9 (Reuters) - Copper fell on Thursday as price
charts suggested a pause a day after the metal's rally to a
three-week high on expectations of rising demand from top
importer China following strong trade numbers.
    Benchmark copper on the London Metal Exchange (LME)
was last bid at $7,354 at the close, down from ending at $7,419
in the previous session, when it hit its highest since April 12
at $7,480.
    Better-than-expected Chinese trade data as well as a rise in
Germany's industrial output and upbeat U.S. payroll figure
triggered a short-covering rally this
week.  
    "In general short positions on copper are still pretty big,
so my feeling is that there are still some legs on the upside
for copper. I wouldn't be surprised to see the short-covering
take copper certainly past $7,500 and possibly to $7,700,"
analyst Gayle Berry at Barclays said.
     "Fundamentals have been getting a bit better, even though
the macro sentiment is still pretty weak. Stocks have been
falling, physical premiums have been going up and activity at
some of the end-users in China looks a bit better." 
    Stocks of copper in LME-registered warehouses 
fell by 75 tonnes to 605,750 tonnes, daily data issued on
Thursday showed. They have been declining in the past two weeks
following a steep increase in the previous six months.
    Rio Tinto said it could gain Mongolian approval to
ship copper from its huge Oyu Tolgoi mine earlier than expected,
adding to concerns about oversupply.  
    "Oyu Tolgoi running ahead of schedule shows that mine supply
is improving, so you do have a more well-defined surplus in the
second half of the year, which will put pressure on prices
again," Berry said.
    Also weighing on copper, China's imports of the metal fell
7.4 percent in April from a month before to hit a 22-month low,
data showed on Wednesday. 
    
    CHINA INFLATION CLIMBS
    Analysts and traders said Thursday's weakness in copper was
due to technical factors.
    "After the rally the price is too stretched. There is too
big a gap between the 13-day moving average ($7,520.27), which
is a reference for the short-term trend, and the 30-day moving
average ($7,628)," T-Commodity consultant Gianclaudio Torlizzi
said.
    "Until that gap closes there is a downward risk for copper
prices." 
    Higher consumer inflation in China could also be pressuring
prices. China's annual consumer inflation quickened to 2.4
percent in April from March's 2.1 percent due to higher food
costs. 
    Aluminium ended at $1,891, from $1,908 at the close
on Wednesday, while zinc closed at $1,872 from $1,894.
    Lead ended at $2,017 from $2,064 and tin 
closed at $20,725 from $20,745. Nickel closed at $15,285
from $15,405 at the close on Wednesday.  
    
 Metal Prices at 1605 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       334.15       -2.60     -0.77     365.25     -8.51
  LME Alum      1899.00       -9.00     -0.47    2073.00     -8.39
  LME Cu        7372.50      -46.50     -0.63    7931.00     -7.04
  LME Lead      2030.50      -33.50     -1.62    2330.00    -12.85
  LME Nickel   15437.00       32.00     +0.21   17060.00     -9.51
  LME Tin      20650.00      -95.00     -0.46   23400.00    -11.75
  LME Zinc      1879.75      -14.25     -0.75    2080.00     -9.63
  SHFE Alu     14620.00       20.00     +0.14   15435.00     -5.28
  SHFE Cu*     53230.00      340.00     +0.64   57690.00     -7.73
  SHFE Zin     14550.00      -45.00     -0.31   15625.00     -6.88
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