* Copper hits lowest level since September 7
* Tin tumbles nearly 4 percent
* Japan exports down 10.3 pct year on year
* Aluminium output remains high, more surpluses loom
By Susan Thomas and Eric Onstad
LONDON, Oct 22 Copper hit the lowest in more than a
month on Monday after a bigger than expected fall in Japan's exports,
reflecting the global economic slowdown and curbing investors'
appetite for assets perceived as risky.
Exports to China, which overtook the United States as Japan's top
market in 2009, fell 14.1 percent in September from a year earlier,
the biggest decline since January. Shipments to the European Union
also dropped a striking 21.1 percent as Europe's debt crisis remained
"The export data for September was particularly poor," said
Natixis strategist Nic Brown.
"And if you look at the way in which Japanese exports are a
function of the demand from the rest of Asia - that's become clearly
apparent over the last couple of years - this is a reflection of
weakness in the Asian economy as a whole."
Three-month copper on the London Metal Exchange closed 0.8
percent weaker at $7,953 per tonne after touching an intraday low of
$7,930, the weakest since Sept. 7.
The metal, used extensively in construction and power, has broken
below its range of $8,000 and $8,400 held since early September, which
may prompt further liquidation of long positions, traders said.
In September, Beijing announced plans to spend $157 billion on
infrastructure projects, but those are likely to be on hold until
China's once-in-a-decade leadership change is finalised next month and
the new leadership takes over next spring.
"The question is, how much longer do we have to wait until the new
political team is genuinely in charge and starting to make decisions?"
HIGHER ALUMINIUM SURPLUS
Also indicative of sluggish Chinese downstream demand for copper
are rising stocks in warehouses monitored by Shanghai Futures
Exchange, which by Friday had jumped more than 8 percent on the week
and 48.5 percent since early June.
"The rise in inventories was due to China's sluggish downstream
demand for copper, as well as its recent high copper imports and
output levels," said Great Wall Futures Analyst Li Rong.
Data on Monday showed Chinese copper production in September
matched its second-highest level this year as tight scrap supplies and
favourable export policies encouraged smelters to keep output high.
China's imports of copper rose 11 percent in September on the
month to 394,837 tonnes, the General Administration of Customs said
In aluminium, data from the International Aluminium Institute
showed global daily output rose slightly in September to 67,000
tonnes. Analysts said this showed that needed capacity cuts were not
occurring despite estimates that 30-40 percent of producers were
Even before the data was released, BNP Paribas analyst Stephen
Briggs had increased his forecast of the global surplus.
"Due to softer than expected demand and with few fresh smelter
cutbacks having been announced in recent months, we have raised our
forecast of the physical surplus in the aluminium market in 2012 to
750,000 tonnes," he wrote in a note released on Friday afternoon.
"This may take the cumulative surplus in 2008-12 to nearly 9 million
On the LME, three-month aluminium closed 0.5 percent lower
at $1,960 a tonne as LME aluminium stocks rose by
23,750 tonnes to 5.06 million tonnes, close to the record of 5.13
million touched in February.
Tin tumbled 3.9 percent to end at a near-one-month low of
20,450 a tonne, zinc lost 1.5 percent to finish at $1,856,
lead fell 2.1 percent to $2,070, and nickel gave up
2.2 percent to $16,590, its weakest since Sept. 13.
Metal Prices at 1608 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
COMEX Cu 361.90 -1.95 -0.54 344.75 4.97
LME Alum 1962.00 -53.00 -2.63 2020.00 -2.87
LME Cu 7961.50 -53.50 -0.67 7600.00 4.76
LME Lead 2073.25 -41.75 -1.97 2034.00 1.93
LME Nickel 16624.00 -331.00 -1.95 18650.00 -10.86
LME Tin 20525.00 -750.00 -3.53 19200.00 6.90
LME Zinc 1861.25 -23.75 -1.26 1845.00 0.88
SHFE Alu 15450.00 -65.00 -0.42 15845.00 -2.49
SHFE Cu* 57890.00 -570.00 -0.98 55360.00 4.57
SHFE Zin 14965.00 -100.00 -0.66 14795.00 1.15
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07