* China sees GDP growth at 7.5 percent
* European, Japanese, British central bank meetings this week
* U.S. service sector grows at fastest pace in a year
By Harpreet Bhal
LONDON, March 5 Copper rose on Tuesday as a pledge by top
consumer China to maintain economic growth at 7.5 percent boosted the outlook
for demand, with added support from expectations of accommodative monetary
policy around the world.
Three-month copper on the London Metal Exchange closed at $7,772 a
tonne, up from a close of $7,725 a tonne on Monday. Last week prices hit their
lowest level in more than three months at $7,652 a tonne.
China aims to expand its economy by 7.5 percent in 2013 and keep consumer
inflation running around 3.5 percent for the year, outgoing Premier Wen Jiabao
said on Tuesday at the start of annual parliament meetings.
Demand from China, which accounts for 40 percent of global copper
consumption, slowed last month ahead of the week-long Lunar New Year holiday,
but expectations of a rebound have gathered pace ahead of the seasonally
stronger second quarter.
"Over the short term we're likely to see prices at around current levels for
the next few months. You do have some continuation in the Chinese recovery story
and that will help to support prices," said Ross Strachan, an economist at
"But in the second half we think that the recovery (in China) will be more
disappointing than some have anticipated. We're expecting prices of around
$7,000 for copper by the end of the year."
Helping to boost sentiment were expectations that central banks' monetary
policy will remain accommodative when the European Central Bank, Bank of Japan
and Bank of England hold policy meetings later this week.
Also, the pace of growth in the vast U.S. services sector accelerated to its
fastest pace in a year in February, helped by a pick-up in new orders and demand
for exports, according to an industry on Tuesday.
Copper shed more than 4 percent in February and is trading around 2 percent
lower for the year to date.
"It (copper) has got itself a bit oversold in the short term, and hence I
would not be surprised to see a sharp corrective bounce in the coming days,"
independent technical analyst Cliff Green said.
"Resistance now waits at initially 7,850, which if broken could extend gains
closer to the technically more important 7,940 region," he said in a Q&A session
in the Reuters Global Base Metals forum.
Chinese consumers are coming back into the market since the Lunar New Year,
and orders are expected to steadily improve in coming weeks, traders said.
Looking ahead, concerns about a slowdown in U.S. growth after automatic
government spending cuts kicked in on March 1 could push copper prices lower in
coming weeks and hurt growth in the second quarter, BofA Merrill Lynch said in a
note to clients.
Tin closed at $23,450 from Monday's close of $23,375, and zinc
at $2,007 from $2,002.
Lead closed at $2,225 from $2,216, aluminium at $1,976 from
$1,974, and nickel at $16,700 from $16,450.
Metal Prices at 1709 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
COMEX Cu 351.05 1.90 +0.54 365.25 -3.89
LME Alum 1978.00 4.00 +0.20 2073.00 -4.58
LME Cu 7760.50 35.50 +0.46 7931.00 -2.15
LME Lead 2227.25 11.25 +0.51 2330.00 -4.41
LME Nickel 16641.00 191.00 +1.16 17060.00 -2.46
LME Tin 23460.00 85.00 +0.36 23400.00 0.26
LME Zinc 2007.50 5.50 +0.27 2080.00 -3.49
SHFE Alu 14665.00 70.00 +0.48 15435.00 -4.99
SHFE Cu* 56960.00 540.00 +0.96 57690.00 -1.27
SHFE Zin 15390.00 50.00 +0.33 15625.00 -1.50
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07