METALS-Copper gains on weak dollar, China data eyed this week
* Dollar falls against basket of currencies
* Copper down 11 percent so far this year
* Volumes low, traders say buying on dips
By Harpreet Bhal
LONDON, Aug 6 (Reuters) - Copper prices rose on Tuesday, helped by a weak dollar and ahead of trade and industrial output data from China this week that should shed light on the outlook for demand from the top metals consumer.
Three-month copper on the London Metal Exchange, untraded at the close, was last bid at $7,005 a tonne, up from a close of $6,975 on Monday. Volumes remained thin due to the summer holidays.
Helping gains was a drop in the dollar against a basket of currencies. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies.
Metals market direction is likely to hinge on the Chinese data, which is expected to confirm that the economy is still shifting down but not about to come to a screeching halt.
Data scheduled for this week includes trade numbers, inflation, industrial output and retail sales. China is the world's largest consumer of copper, accounting for around 40 percent of global refined demand.
"In China there seems to be a gradual ramping up of infrastructure projects to help support growth. I'm not too negative on the outlook for copper demand from China," said Nic Brown, head of commodities research at Natixis.
"There are signs of shortage in the physical market (in China) and the macroeconomic situation looks OK."
Copper prices have found a floor around the $6,700-a-tonne level with consistent buying emerging on dips, traders and analysts said. The metal, used in power and construction, is down 11 percent so far this year.
"July to early September is traditionally a slack season for demand in China. Traditionally speaking, producers of copper electrical wire will start preparing for orders around Christmas and Chinese New Year and that will then give support," said Chunlan Li of consultancy CRU in Beijing.
In other metals, immediate demand for tin has surged in the past month, pushing up LME cash prices to a $28 premium over three-month prices, the highest since November last year, from a $67 discount a month ago.
Benchmark tin closed at $21,250 a tonne from a $21,225 close on Monday.
An Indonesian overhaul of tin trading rules that raises minimum purity levels is expected to slash shipments from the world's top refined tin exporter for a few months, potentially pushing up prices for the metal.
Benchmark lead closed at $2,110.50 from a close of $2,122, nickel at $13,730 from $13,875 and aluminium at $1,788.50 from a close of $1,800 on Monday.
Zinc, untraded at the close, was bid at $1,857 from $1,869.
- Malaysia Airlines loses contact with plane carrying 239 people |
- REFILE-UPDATE 3-Malaysia Airlines loses contact with plane carrying 239 people
- China draws red line' on North Korea, says won't allow war on peninsula
- No signal picked up from missing Malaysia Airlines plane-Vietnam official
- China helping locate missing Malaysia Airlines plane: TV