METALS-Copper up but China growth fears weigh

Mon Jul 8, 2013 12:32pm EDT

* Dollar retreats from 3-yr high vs a basket of currencies
    * China trade data will give clues on appetite for metals

    By Silvia Antonioli
    LONDON, July 8 (Reuters) - Copper rose on Monday, recovering
from a sharp drop on Friday as the dollar retreated from
three-year highs, but worries over demand prospects in top
consumer China kept gains in check.
    Benchmark copper on the London Metal Exchange (LME)
ended at $6,830 a tonne, up from Friday's close of $6,789.
    It fell more than 2 percent in the previous session after
data pointing to stronger-than-expected growth in the U.S. job
market bolstered concerns that the Federal Reserve could start
winding down its stimulus programme as early as September.
 
    The metal, used in the power and construction industries,
has lost about 15 percent so far this year.
    The U.S. dollar dipped against a basket of currencies as
investors took profit after earlier pushing the greenback to a
three-year high following last week's strong U.S. jobs data.
 
    But analysts said the retracement was temporary and that the
currency would resume its uptrend. 
    A stronger dollar makes dollar-priced commodities such as
metals costlier for non-U.S. investors.     
    China's resolve to revamp its economy for the long-term will
be tested this month when a slew of data is expected to show
growth is grinding towards a 23-year low, with no recovery in
sight. 
    Chinese trade numbers are due on July 10 and gross domestic
product on July 15.   
    "I suspect (copper) will continue to stay under pressure
because of concerns over growth," Societe Generale analyst Robin
Bhar said.
    He added, however: "There is no reason to see fresh lows as
much, if not all, of the negative news should now be
incorporated into the price. The focus will be on Chinese data."
   
    
    POSITIVE FACTORS    
    On the bullish side, data on Friday suggested an improvement
in physical demand.
    Stocks of copper , aluminium and
lead in warehouses registered with the Shanghai
Futures Exchange (SHFE) fell to multi-month lows, while stocks
of zinc fell to their lowest level since late 2010.
    
    "We regard the current pessimism exhibited by market
participants as exaggerated. In our opinion, metal prices should
stabilise, with Wednesday's trade figures from China doubtless
playing their part," Commerzbank said in a research note.
    "After all, metal stocks in China have declined
significantly of late, Chinese traders are likely to have
utilised the low LME prices and the arbitrage between the LME
and the SHFE in recent months to step up their metals
purchases."
 Metal Prices at 1617 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         3.10        0.03     +1.07     365.25   
 -99.15
  LME Alum      1803.00       -9.00     -0.50    2073.00   
 -13.02
  LME Cu        6830.00       50.00     +0.74    7931.00   
 -13.88
  LME Lead      2073.25       43.25     +2.13    2330.00   
 -11.02
  LME Nickel   13440.00      140.00     +1.05   17060.00   
 -21.22
  LME Tin      19376.00      526.00     +2.79   23400.00   
 -17.20
  LME Zinc      1875.50      135.50     +7.79    2080.00    
 -9.83
  SHFE Alu     14225.00      -80.00     -0.56   15435.00    
 -7.84
  SHFE Cu*     49030.00     -850.00     -1.70   57690.00   
 -15.01
  SHFE Zin     14415.00      -70.00     -0.48   15625.00    
 -7.74
 ** 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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