METALS-Copper Down on Dollar strength, China Worries-Shanghai Metals Market

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METALS-Copper Down on Dollar strength, China Worries

Industry News 09:09:32AM Mar 19, 2010 Source:SMM

NEW YORK/LONDON, March 18 (Reuters) - Copper prices remained depressed in late business on Thursday, under pressure from a stronger dollar and fears that potential further monetary tightening in China could cap demand in the world's top copper consumer.

Copper for May delivery HGK0 on the New York Mercantile Exchange's COMEX division shed 2.25 cents to finish at $3.3955 per lb, after dealing between $3.3755 and $3.4280. In after-hours trade, prices held near the $3.40 level.

On the London Metal Exchange, benchmark copper for three-months delivery MCU3 closed at $7,486 a tonne in official rings from a close of $7,534 on Wednesday. After the close, it gained a little bit of traction to trade at $7,500 per tonne by 1757 GMT.

The euro weakened against the dollar as uncertainty grew over a resolution to Greece's debt problems, and the U.S. currency rose nearly 1 percent against a major currency basket.

"Those Greek issues are not going to go away any time soon," said Charles Kernot, an analyst at Evolution Securities. "It creates uncertainty for the euro, so people are probably switching euros into dollars at moment."

Fears of further moves by Beijing to tighten credit have contributed to jitters in equity and commodity markets across the globe.

"Generally what we see is this push and pull between stronger demand coming through outside China, but concerns about tighter monetary policy in China and potential slower economic growth there," said Gayle Berry, analyst at Barclays Capital.

China's central bank is set to mop up a massive 213 billion yuan ($31 billion) in its open market operations this week, in its latest bid to cut the amount of cash surging through the economy.

Sparking expectations for brighter demand prospects outside China was U.S. data showing a gradual improvement in the labor market, where the number of workers filing new jobless claims fell slightly last week.

OUTSIDE CHINA
Limiting losses in copper, LME data showed copper stocks fell 1,400 tonnes to total 524,175 tonnes, their lowest since mid-January, giving investors further evidence that demand outside China is recovering.

LME copper stocks are expected to fall further in the second quarter, traditionally the strongest for metals demand. Among other industrial metals, aluminum MAL3 traded at $2,276 from $2,295 on Wednesday, with sentiment knocked by data showing LME stocks rose 72,175 tonnes to total a near record 4.61 million tonnes.

Justin Lennon, analyst with Mitsui Bussan Commodities (USA) Inc., said the large increase in aluminum inventories and the approved expansion of Teck Resources' (TCKb.TO) Red Dog zinc mine combined to create a drag on the broader base metals complex.

"The threat of excess supply amid an extended period of weak Western demand is going to provide fundamental resistance to swiftly higher prices," he said.

Zinc MZN3 traded at $2,333 from $2,345.

Stainless steel ingredient nickel MNI3 traded at $22,760 from $22,250. Nickel has rallied around 20 percent this year, making it the strongest performer of the base metals complex. It hit a late peak at $22,800, its highest since March 8.

A strike in Canada, delays in bringing the New Caledonia Goro mine into production and most recently, a problem at BHP Billiton's Nickel West operation in Kwinana, Australia, have helped lift prices. Battery material lead MPB3 was at $2,245 from $2,255 and tin MSN3 was at last quoted at $17,790/17,795 from $17,750.
 

Key Words:  base metal  copper Cu  copper price 

METALS-Copper Down on Dollar strength, China Worries

Industry News 09:09:32AM Mar 19, 2010 Source:SMM

NEW YORK/LONDON, March 18 (Reuters) - Copper prices remained depressed in late business on Thursday, under pressure from a stronger dollar and fears that potential further monetary tightening in China could cap demand in the world's top copper consumer.

Copper for May delivery HGK0 on the New York Mercantile Exchange's COMEX division shed 2.25 cents to finish at $3.3955 per lb, after dealing between $3.3755 and $3.4280. In after-hours trade, prices held near the $3.40 level.

On the London Metal Exchange, benchmark copper for three-months delivery MCU3 closed at $7,486 a tonne in official rings from a close of $7,534 on Wednesday. After the close, it gained a little bit of traction to trade at $7,500 per tonne by 1757 GMT.

The euro weakened against the dollar as uncertainty grew over a resolution to Greece's debt problems, and the U.S. currency rose nearly 1 percent against a major currency basket.

"Those Greek issues are not going to go away any time soon," said Charles Kernot, an analyst at Evolution Securities. "It creates uncertainty for the euro, so people are probably switching euros into dollars at moment."

Fears of further moves by Beijing to tighten credit have contributed to jitters in equity and commodity markets across the globe.

"Generally what we see is this push and pull between stronger demand coming through outside China, but concerns about tighter monetary policy in China and potential slower economic growth there," said Gayle Berry, analyst at Barclays Capital.

China's central bank is set to mop up a massive 213 billion yuan ($31 billion) in its open market operations this week, in its latest bid to cut the amount of cash surging through the economy.

Sparking expectations for brighter demand prospects outside China was U.S. data showing a gradual improvement in the labor market, where the number of workers filing new jobless claims fell slightly last week.

OUTSIDE CHINA
Limiting losses in copper, LME data showed copper stocks fell 1,400 tonnes to total 524,175 tonnes, their lowest since mid-January, giving investors further evidence that demand outside China is recovering.

LME copper stocks are expected to fall further in the second quarter, traditionally the strongest for metals demand. Among other industrial metals, aluminum MAL3 traded at $2,276 from $2,295 on Wednesday, with sentiment knocked by data showing LME stocks rose 72,175 tonnes to total a near record 4.61 million tonnes.

Justin Lennon, analyst with Mitsui Bussan Commodities (USA) Inc., said the large increase in aluminum inventories and the approved expansion of Teck Resources' (TCKb.TO) Red Dog zinc mine combined to create a drag on the broader base metals complex.

"The threat of excess supply amid an extended period of weak Western demand is going to provide fundamental resistance to swiftly higher prices," he said.

Zinc MZN3 traded at $2,333 from $2,345.

Stainless steel ingredient nickel MNI3 traded at $22,760 from $22,250. Nickel has rallied around 20 percent this year, making it the strongest performer of the base metals complex. It hit a late peak at $22,800, its highest since March 8.

A strike in Canada, delays in bringing the New Caledonia Goro mine into production and most recently, a problem at BHP Billiton's Nickel West operation in Kwinana, Australia, have helped lift prices. Battery material lead MPB3 was at $2,245 from $2,255 and tin MSN3 was at last quoted at $17,790/17,795 from $17,750.
 

Key Words:  base metal  copper Cu  copper price