METALS-Copper falls on firm dollar, weak demand prospects
* Euro zone imports fall 10 pct in March * Dollar at six-week high vs euro, 4-1/2 year peak vs yen * Coming up: U.S. building permits, housing starts 1230 GMT By Susan Thomas LONDON, May 16 (Reuters) - Copper fell on Thursday as the dollar strengthened and on concern about lacklustre demand for the metal in top consumer China that was compounded by evidence the European and United States economies are still struggling. Copper is seen as an economic bellwether because it is used extensively in construction and power cables. Three-month copper on the London Metal Exchange was down 0.6 percent at $7,151 a tonne by 1006 GMT, from a close of $7,198 on Wednesday. "The U.S. dollar is getting substantially stronger and the movement in copper seems to be tracking that quite highly. And we still see quite limited activity from China," analyst George Adcock at broker Marex Spectron said. "CTA short covering has dissipated and that was basically giving bid support in the market and the CTAs are now net sellers," he added, referring to commodity trading advisors. The dollar was near a six-week high against the euro and a 4-1/2 year peak against the yen on Thursday on prospects for more monetary easing in the euro zone and scaled back asset buying in the United States. The depth of the euro zone's downturn was shown in data on Thursday. Falling prices in Germany and France pulled consumer inflation to a three-week low in April, highlighting the risk of deflation, and imports fell 10 percent in March. In the United States, factory output dropped in April and manufacturing activity in New York state contracted this month, data showed on Wednesday. "The trend has been down for copper. I still feel we've got further downside to come because of the trend of weak global macro data coming through," said Tim Radford, global analyst at Sydney-based advisor Rivkin. China's demand for commodities has weakened, and the country's vice-premier Zhang Gaoli said in remarks published late on Wednesday that China must "strictly prohibit" further expansion of bloated industrial sectors. Overall, all commodities are under pressure. This was reflected in reports this week that showed global investment banks suffered another bruising decline in commodity trading in the first three months of this year. Investors are waiting for U.S. building permits and housing starts reports later in the session, although for the metals market the impact will be felt through the effect the data has on the dollar. A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies. Metal Prices at 1004 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 324.60 -1.75 -0.54 365.25 -11.13 LME Alum 1839.25 -0.75 -0.04 2073.00 -11.28 LME Cu 7146.00 -52.00 -0.72 7931.00 -9.90 LME Lead 1960.00 -10.00 -0.51 2330.00 -15.88 LME Nickel 14909.00 4.00 +0.03 17060.00 -12.61 LME Tin 20620.00 -135.00 -0.65 23400.00 -11.88 LME Zinc 1820.50 -2.50 -0.14 2080.00 -12.48 SHFE Alu 14525.00 -45.00 -0.31 15435.00 -5.90 SHFE Cu* 52270.00 -300.00 -0.57 57690.00 -9.40 SHFE Zin 14370.00 -75.00 -0.52 15625.00 -8.03 ** 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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