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METALS-London copper edges up as dollar takes breather from gains
September 5, 2013 / 7:51 AM / 4 years ago

METALS-London copper edges up as dollar takes breather from gains

* Dollar steadies below below 6-week high
    * Tin backwardation strikes 3-yr peak on Indonesia shortfall
    * Coming up; U.S. Challenger layoffs for August at 1130 GMT


    By Melanie Burton
    SINGAPORE, Sept 5 (Reuters) - London copper nudged higher on
Thursday after a sharp loss in the previous session, as the
dollar took a breather from recent strength ahead of key U.S.
data and as signs of the Chinese economy stabilising raised
hopes for demand.
    Copper prices have fallen to the low end of their recent
$7,000-$7,500 a tonne range due to a buoyant dollar as investors
priced in a tapering of the U.S. Federal Reserve's huge
bond-buying program as early as this month. 
    The dollar was just below a six-week high on Thursday in
part due to strength in the euro as euro zone business orders
picked up. A stronger dollar makes commodities priced in the
greenback more expensive for holders of other currencies.
  
    "The improving euro zone situation has been mitigating some
of the dollar strength after Fed expectations and geopolitical
concerns drove up the dollar," said Thomas Lam, chief economist
at DMG & Partners Securities in Singapore.
    "We could see some recovery in copper prices in line with
the improvement in the global economy although I don't expect
the growth background in China to be a significant driver for
copper prices in the near term," he added.
    Three-month copper on the London Metal Exchange rose
as much as half a percent before paring gains by 0341 GMT to
trade up 0.2 percent at $7,137.50 a tonne. It fell 1.5 percent
on Wednesday.
    The most-traded December copper contract on the Shanghai
Futures Exchange slipped 0.9 percent to close at 51,670
yuan ($8,400) a tonne.
    Growth in China's services sector hit a five-month high in
August, the latest evidence that the world's second-largest
economy may have avoided a sharp slowdown. 
    The U.S. economy expanded at a "modest to moderate" pace in
most of the country between early July and late August,
according to a Federal Reserve report that was just strong
enough to reinforce the prospect of a pullback in monetary
stimulus. 
    Markets are looking ahead to U.S. labour data on Friday.
U.S. employers likely stepped up hiring in August, potentially
paving the way for the Fed to start cutting back its bond
purchases programme later this month. 
    In other metals, Indonesia's No. 1 tin exporter,
state-backed PT Timah, has halted shipments and
declared force majeure, blaming new trading rules and dealing a
blow to government efforts to boost the nation's influence in
commodity markets. 
    The shortfall in supply has helped drive up cash prices to a
$125 premium against the benchmark three-month contract during
Wednesday's evaluation, the highest level since August 2010. 
    
     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               
    Three month LME tin

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