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METALS-Copper eases for second day on doubts over China demand
April 26, 2016 / 4:35 AM / a year ago

METALS-Copper eases for second day on doubts over China demand

* Copper loses more ground on China worries, market cautious

* Rising inventories in Asia pressure copper prices (Adds comment, detail)

By Naveen Thukral

SINGAPORE, April 26 (Reuters) - London copper slid for a second session on Tuesday, easing further from last week’s five-week peak amid doubts about demand in top user China and concerns over rising Asian inventories.

Three-month copper on the London Metal Exchange had fallen 1 percent to $4,948 a tonne by 0411 GMT. The most-traded June copper contract on the Shanghai Futures Exchange lost 1.8 percent to 37,620 yuan a tonne.

“A weaker U.S. dollar has failed to support base metals; instead rising inventories were weighing on investors’ minds,” ANZ said in a research note.

It added that copper inventories in Asian warehouses have jumped 8 percent to 72,675 tonnes, the highest since Jan. 20.

The metal gained nearly 5 percent last week when it touched a five-week peak of $5,091 as investors returned after seeing signs of stabilisation in China’s economy including in industrial output, loans and the property sector.

Asian stocks retreated as investors braced for central bank policy meetings in the United States and Japan this week. The dollar index, which tracks the greenback against a basket of six major currencies, slid 0.2 percent to 94.682.

Trading across risk assets is expected to be subdued as investors wait for the outcome of the Federal Reserve’s two-day meeting that starts on Tuesday.

A surprise drop in new U.S. home sales data for March released on Monday supported a view of anaemic U.S. economic growth, which may keep the U.S. central bank from raising interest rates.

The Fed is expected to hold rates steady at this week’s meeting and markets are pricing in just about a one in five chance of a hike at the next meeting on June 14-15.

On the technical front, copper is expected to rise to $5,032, as it has found a support around $4,980 per tonne, according to Wang Tao, Reuters market analyst for commodities and energy technicals.

Top copper producer Codelco will scale back plans for its Rajo Inca project, intended to extend the mine life of its Salvador deposit, and an investment decision will be made within two years, the company’s chief executive said.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin (Reporting by Naveen Thukral; Editing by Joseph Radford)

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