METALS-Copper slips on concerns about China growth, inventories

Tue May 14, 2013 12:20pm EDT

* Weak Chinese data the focus
    * LME stock jump by 12,000 tonnes, near decade high
    * Indian court postpones Sterlite smelter hearing


    By Maytaal Angel
    LONDON, May 14 (Reuters) - Copper fell more than 2 percent on Tuesday as
poor factory output data from China, the top user of the metal, fed fears that
demand growth was stalling as copper inventories rose.
    Three-month copper on the London Metal Exchange closed 2.3 percent
weaker at $7,245 a tonne, the biggest decline in two weeks and reversing gains
of half a percent in the previous session. 
    Data on Monday showed China's factory output growth was surprisingly weak in
April, while fixed-asset investment also slowed, rekindling concerns that a
nascent recovery in the world's top copper consumer is stalling. 
    The numbers initially lifted copper prices on hopes they would prompt
Beijing to ease monetary policy, but those hopes were dashed on Tuesday after
comments in China's official media suggested the government was unlikely to
follow that route.  
    Copper hit its highest in nearly a month last Wednesday at $7,480 a tonne.
It has clawed back around 9 percent from 18-month lows below $6,800 touched on
April 23, but is still down almost 7 percent for the year.
    "It's the drip, drip, drip of pointers suggesting the period of rapid
Chinese demand growth has come to an end. There is (also) a sense that the
Chinese authorities are reasonably happy to have economic growth sub-8 percent,"
BNP Paribas analyst Stephen Briggs said.
    Market data out earlier also showed LME stocks of the metal rose by 12,000
tonnes to 618,700 tonnes, edging back towards a recent peak of 621,600 tonnes,
which was the highest in almost a decade. 
    Copper stocks had been falling in recent weeks, but overall levels remain
elevated and analysts expect a surge of new supply from mines this year.
    On Monday, miner Glencore Xstrata said copper output rose 18
percent in the first quarter of 2013 as new operations expanded to substitute
depleted mines and output climbed at its legacy operations in Congo.
 
    But there are still scattered fundamental issues that could help support
prices.
    Rio Tinto Ltd  is looking for concentrate for its Kennecott
copper smelter in Utah after a landslide at its nearby mine, sources said.
    And in India, the country's biggest smelter, owned by Sterlite Industries
, remains shut on pollution concerns until May 16 after a New Delhi
court said it would resume a hearing then. 
    The smelter, which meets half of India's demand for copper, has been shut
for seven weeks.
    Elsewhere, at least three people were killed on Tuesday and an unknown
number missing after a training tunnel collapsed at the Indonesian unit of
Freeport-McMoRan Copper & Gold Inc, mine officials said. Output at the
world's second-largest copper mine was not seen much affected.  
 
    Three-month aluminium lost 0.5 percent to close at $1,857 a tonne
and nickel shed 1.3 percent to $15,105.
    Lead ended 1.4 percent weaker at $1,979 a tonne and zinc 
lost 0.9 percent to $1,846. Tin failed to trade in closing rings but was
bid at $20,995 a tonne, up 0.5 percent from Monday's close.
  
 Metal Prices at 1612 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       328.35       -7.65     -2.28     365.25    -10.10
  LME Alum      1858.50       -8.50     -0.46    2073.00    -10.35
  LME Cu        7237.50     -177.50     -2.39    7931.00     -8.74
  LME Lead      1979.25      -28.75     -1.43    2330.00    -15.05
  LME Nickel   15118.00     -182.00     -1.19   17060.00    -11.38
  LME Tin      20900.00        0.00     +0.00   23400.00    -10.68
  LME Zinc      1845.50      -16.50     -0.89    2080.00    -11.27
  SHFE Alu     14565.00      -35.00     -0.24   15435.00     -5.64
  SHFE Cu*     52920.00     -620.00     -1.16   57690.00     -8.27
  SHFE Zin     14450.00     -100.00     -0.69   15625.00     -7.52
 ** 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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