METALS-Copper steady as investors ponder U.S., Chinese data

Fri May 24, 2013 9:18am EDT

By Silvia Antonioli
    LONDON, May 24 (Reuters) - Copper was little changed on Friday as investors
weighed the potential impact on metals demand of upbeat figures on U.S. jobs and
factory output versus data showing slower industrial activity in top metals
consumer China.
    Benchmark copper on the London Metal Exchange traded at $7,280 a
tonne at 1300 GMT, down only slightly from its close of $7,300 on Thursday.
    Data out on Thursday showed China's factory activity shrank for the first
time in seven months in May, raising fears that its economic recovery has
stalled. 
    Partially balancing concerns about China, which accounts for about 40
percent of global copper consumption, data from the United States showed orders
for long-lasting manufactured goods rose more than expected in April. 
    U.S. data on Thursday also showed a bigger-than-expected drop in claims for
unemployment benefits. 
    "It seems positive data from the U.S. has helped, but the data on China
yesterday was bearish," Sucden Financial analyst Kashaan Kamal said.
    "We've seen a gradual price decline since late January as concerns of slower
growth have put pressure on prices, but this recent data highlighted the bearish
outlook for both domestic and export demand." 
    China's economy grew by a less-than-forecast 7.7 percent in the first three
months of the year. Its imports of refined copper declined by more than a third
in January-April, dragging down LME copper prices by 12 percent from this year's
peak. 

    TIGHTER SUPPLY
    Despite the weakness in its manufacturing sector, China is unlikely to
launch any stimulus, with the economy still on track to grow by 7.5 to 8 percent
this year, in line with government targets, Commonwealth Bank of Australia said
in a note.
    "Incremental easing - for instance a more accommodative stance toward the
property sector - is about all we expect might change," the bank said.
    Fundamentals, in the meantime, were providing some support to copper prices.
    Signalling demand for the metal may be improving, copper inventories in
warehouses monitored by the Shanghai Futures Exchange fell 7.2 percent from last
Friday to their lowest in more than seven months, data showed on Friday. 
    Stocks in LME-registered warehouses also fell, daily data showed on Friday,
posting a 2,700 tonnes decline to 621,175 tonnes, their lowest in two weeks. 
    A production outage since a May 15 tunnel collapse killed 28 workers at
Grasberg in Indonesia, the world's second-largest copper mine, should also
support prices. A trade union official said on Thursday all investigations into
the incident at the Freeport McMoRan mine must be completed before
workers return. 
    Jinchuan Group Ltd, China's third-largest copper producer, has
shut a 200,000 tonne-a-year facility due to a raw scrap shortage, which could
reduce its refined output by more than 16 percent this year, an executive said
on Friday.    
    Aluminium was at $1,849 a tonne from a $1,850 close on Thursday, and
lead was at $2,050.75 a tonne from $2,045. Zinc traded at $1,852
a tonne from $1,856, tin at $21,135 from $20,950 and nickel at $14,807
from $14,940.
 Metal Prices at 1301 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       330.25        0.35     +0.11     365.25     -9.58
  LME Alum      1848.00       -2.00     -0.11    2073.00    -10.85
  LME Cu        7272.50      -27.50     -0.38    7931.00     -8.30
  LME Lead      2050.25        5.25     +0.26    2330.00    -12.01
  LME Nickel   14803.00     -137.00     -0.92   17060.00    -13.23
  LME Tin      21075.00      125.00     +0.60   23400.00     -9.94
  LME Zinc      1851.00       -5.00     -0.27    2080.00    -11.01
  SHFE Alu     14650.00       25.00     +0.17   15435.00     -5.09
  SHFE Cu*     53000.00      160.00     +0.30   57690.00     -8.13
  SHFE Zin     14530.00       90.00     +0.62   15625.00     -7.01
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07