By Silvia Antonioli
LONDON, Dec 4 Copper was little changed on Tuesday, hovering near a
six-week high hit the previous session on optimism that top copper consumer China
is on the road to recovery, but concern over U.S. economic and fiscal issues kept
prices in check.
Benchmark copper on the London Metal Exchange was untraded in rings but
was bid at $8,010 a tonne in official rings, from Monday's close at $8,005.
The metal, used in power and construction, hit its highest level since Oct. 19
at $8,045 on Monday, after data showed the pace of activity in China's
manufacturing sector quickened for the first time in 13 months in November, adding
to evidence its economy is reviving.
China consumes about 40 percent of the global copper supply.
Copper prices then lost some ground after data showed the U.S. manufacturing
sector had unexpectedly contracted in November, falling to its lowest in over three
"The Chinese manufacturing data was well received but the U.S. data was below
expectations which is what took us down later on yesterday and earlier today," said
metals analyst Ivan Szpakowski at Credit Suisse.
"But we think copper is going to continue to rally in the next couple of months
as from here on we should see some macro improvement. We see China getting better
and we think there is good potential for restocking activity both in the U.S. and
From now to the end of the year, investor focus will be on U.S. efforts to
avoid a combination of spending cuts and tax increases due in early 2013 that may
cut the federal budget deficit but also tip the economy back into recession.
Any kind of successful resolution to the fiscal issue would unleash a
significant inflow of money into risk assets including commodity and base metals,
according to analysts.
INTL FCStone analyst Edward Meir believes a deal among U.S. lawmakers is highly
"While there may be occasional setbacks, we still expect an ultimate agreement,
leading to a firmer tone in practically all markets heading into year-end," Meir
said in a note.
High inventories of copper in Asia and a looming increase in global copper
supply in 2013, however, are likely to contain gains.
Copper stocks in China's bonded warehouses hit a record high of more than 1
million tonnes in November and are expected to rise by a further 100,000 tonnes by
the end of the year due to weak domestic demand, traders said.
Aluminium traded at $2,103 in rings from $2,120 while battery material
lead, untraded in rings, was bid at $2,237 from $2,256.
Tin was bid at $21,725 from $21,855 and zinc was bid at $2,028
from $2,040 Monday's close.
Nickel was bid at $17,400 from $17,500.
Metal Prices at 1309 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 365.15 0.35 +0.10 344.75 5.92
LME Alum 2102.25 -17.75 -0.84 2020.00 4.07
LME Cu 8031.50 26.50 +0.33 7600.00 5.68
LME Lead 2239.75 -16.25 -0.72 2034.00 10.12
LME Nickel 17400.00 -100.00 -0.57 18650.00 -6.70
LME Tin 21760.00 -95.00 -0.43 19200.00 13.33
LME Zinc 2028.25 -11.75 -0.58 1845.00 9.93
SHFE Alu 15395.00 -65.00 -0.42 15845.00 -2.84
SHFE Cu* 57250.00 -270.00 -0.47 55360.00 3.41
SHFE Zin 15290.00 -145.00 -0.94 14795.00 3.35
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07