August 8, 2014 / 10:07 AM / 3 years ago

METALS-Copper steady near 5-week low, falling China imports weigh

* Exports from China jump 14.5 pct in July

* China’s copper arrivals fall 2.9 pct in July

* China’s bonded copper stocks seen falling to 660,000 T -CRU (Updates with closing prices)

By Harpreet Bhal

LONDON, Aug 8 (Reuters) - Copper prices steadied on Friday, but remained near a five-week low due to increased supply and lacklustre demand from top consumer China.

Three-month copper on the London Metal Exchange (LME) closed at $6,995 a tonne, compared with $6,970 at the close on Thursday.

Buoyant exports from China pushed its trade surplus to a record last month, fuelling optimism that global demand will help counter pressure on the domestic economy from a weakening property sector.

Its copper arrivals, however, dropped 2.9 percent month-on-month in July, falling for a third straight month, after small importers delayed refined metal shipments.

The metal, used in power and construction, sank to a five-week low on Wednesday at $6,951.75 a tonne.

“The Chinese import number is punching the copper prices lower, and given that we have a war of sanctions between Russia and the West, it can only translate as weakness for copper demand,” said Naeem Aslam, chief market analyst at Ava Trade.

In the latest development in the Ukraine crisis, the head of NATO urged Russia to “step back from the brink” of war by pulling its troops back from the Ukrainian border.


Freeport-McMoRan Inc’s Indonesia unit has completed its first copper concentrate export shipment since the country’s introduction of new mining rules, a spokeswoman said, signalling the end of a seven-month tax spat with the government.

The resumption of Freeport’s shipments flags a trend of improving mine supply, which is expected to free up ore for smelters and tip the metal into surplus after years of deficit.

“Supply is going to increase gradually throughout the second half, because many smelters already had maintenance shutdowns in the first half, so we believe that their performance will be better,” said analyst Li Chunlan at consultancy CRU in Beijing.

“Overall, demand might have a seasonal pick-up from September, but year-on-year it will be steady ... I don’t think there will be a strong demand recovery going forward because of sliding real estate investment, sales and prices.”

The copper market is expected to be in a 226,000 tonne surplus by the end of 2014, a Reuters poll in July showed, with the surplus seen rising to 285,000 tonnes in 2015.

Bonded copper stocks in China have fallen to 660,000 tonnes, from 815,000 tonnes at the end of May, in part because suspected metals fraud in China’s Qingdao port has made it more difficult for traders to finance stock, Li said.

In other metals, benchmark nickel closed at $18,560, slipping back after rallying to a 1-1/2 week high on Thursday on supply worries that have flared this year after a ban on Indonesian ore exports took effect in January. It closed at $18,725 on Thursday.

LME zinc closed at $2,295 a tonne from $2,357.50, while lead closed at $2,240 from $2,243.

LME aluminium, untraded at the close, was bid at $2,024 per tonne from $2,015, and tin, also untraded, was bid at $22,375 from $22,280.


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

Additional reporting by Melanie Burton in Sydney; Editing by David Evans and Jane Baird

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