* Copper supply expected to move from deficit to surplus
* Chinese growth worry weighs on base metal prices
By Susan Thomas and Harpreet Bhal
LONDON, Jan 3 Copper dipped on Friday, easing
from a seven-month high as expectations of higher supplies and
concerns over Chinese growth weighed on the market.
Three-month copper on the London Metal Exchange
closed at $7,315 a tonne from $7,393. It hit an intra-day high
of $7,460 on Thursday, its highest level since June 5.
Copper has gained support from a lack of readily available
refined metal because of falling exchange stocks. But ample
copper concentrate seen flowing into the market this year will
result in swelling supplies.
"We've been saying for a long time that the copper market is
still in deficit. The fall in stockpiles that has taken place
since June is very substantial ... so it's not unreasonable for
the market to be pricing some sort of short-term physical
scarcity," Natixis analyst Nic Brown said.
"It's a different question as we go into 2014. Our view is
that, yes, we will move from deficit to surplus this year. We
think there is a decent amount of new supply coming on stream."
Analysts polled by Reuters in October expected the copper
market to show a surplus of 182,000 tonnes in 2013, before
ballooning to 328,000 tonnes in 2014.
Copper fell 7.2 percent in 2013, though it gained more than
4 percent in December, posting its biggest monthly rise since
Copper stocks in LME-monitored warehouses are at the lowest
level since January 2013.
"Cancelled warrants on the LME now account for about 65
percent of total stocks, so inventories on hand are actually
less than the headline figure implies," said Edward Meir,
analyst at INTL FCStone, referring to stocks earmarked for
However, a survey showing that Chinese factory activity
expanded at the slowest pace in three months in December served
to restrain copper on Friday.
Signs of an improving global economy have underpinned copper
but China's growth is key for the market. China is the world's
largest consumer of the metal, accounting for as much as 40
percent of global demand for refined copper.
Investors in the industrial metals market will be watching a
spate of speeches from top U.S. Federal Reserve policymakers,
including outgoing Chairman Ben Bernanke, later on Friday. Any
comments on the outlook for tapering monetary stimulus could
affect market sentiment.
LME tin ended at $21,500 from Thursday's close of
$22,075, and lead ended at $2,176 from $2,221. Zinc
closed at $2,026 from $2,075.
Aluminium, untraded at the close, was bid at $1,772
per tonne from $1,803. Nickel, also untraded, was bid at
$13,845 per tonne from $14,030.
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
Three month LME tin