METALS-Copper Hits 7-1/2-month Low on Recovery Doubts-Shanghai Metals Market

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METALS-Copper Hits 7-1/2-month Low on Recovery Doubts

Industry News 09:04:17AM Jun 07, 2010 Source:SMM

NEW YORK/LONDON, June 4 (Reuters) - Base metals fell again for a fourth day on Friday, with copper hitting its lowest price since October 2009, after disappointing U.S. jobs data added to doubts about the global economy.

Zinc plunged to a 10-month low, nickel and tin hit their lowest in nearly four months, aluminum sank to a near eight-month low, and lead crumbled to its lowest in almost a year.

"There is a double-dip sort of feel out there, especially after the jobs number this morning," said Zachary Oxman, managing director with TrendMax Futures in Encinitas, California.

The U.S. Labor Department said nonfarm payrolls in May rose by 431,000, far below a consensus estimate for 513,000 new jobs. 

"The economy is just not recovering at the strength at which everybody is thinking. It's recovering at much slower pace, and the market is trying to re-price that," Oxman said.

Copper for July delivery HGN0 on the New York Mercantile Exchange's COMEX division sank 12.70 cents, or 4.3 percent, to settle at $2.8195 per lb, the lowest level on a closing basis for second-position contract since Oct. 13.

"We took out the February low ($2.8525), so contract-wise, we are basically at the lowest point since its been an active month," said Scott Meyers, senior trading analyst with Pioneer Futures in New York.

"I think we are on the tip of economic slowdown again ... we are going to see a period of time where there is going to be red flag after red flag, and there is just going to be concern," he said.

On the London Metal Exchange, benchmark copper for three-month delivery CMCU3 was last bid at $6,280 a tonne on the kerb, and fell to a late-session low at $6,235 per tonne, its lowest since Oct. 19.

Losses in the complex mounted in sympathy with a falling euro, which dropped below $1.20 versus the dollar for the first time in more than four years on fears Hungary could become the next casualty of the European debt crisis. [USD/]

A weak euro makes metals costly for European investors.

The market remained worried about demand in the world's top metals consumer after data this week pointed to a slower pace of manufacturing activity in China, analysts said. 

"China's economic growth has shifted into a lower gear following a very strong period in Q4-2009 and Q1-2010," Standard Chartered said in a note. "We expect China to slow over the next six months, but not dramatically."

FUNDAMENTALS IMPROVE

On the plus side, LME copper stocks, which indicate demand trends, fell 1,300 tonnes to 473,000 tonnes -- their lowest level since late December -- down from 6-1/2-year highs at 555,075 tonnes in mid February.

In other metals traded, aluminum CMAL3 ended at $1,881, down from $1,955, having hit its lowest since mid-October at $1,880. LME stocks for the metal, used in transport and packaging, shed 9,075 tonnes to 4.53 million tonnes.

Zinc CMZN3 ended at $1,641 a tonne, down from $1,740, having hit its lowest since late July at $1,646. Tin CMSN3 finished at $16,005, down from $17,650 after sinking nearly 10 percent to $16,000, its lowest since early February.

Nickel CMNI3 ended at $17,950, down from $18,700, having hit a near four-month low of $17,975, while lead CMPB3 ended at $1,607, down from $1,645, after hitting a near one year low at $1,591.

On Thursday, lead canceled warrants -- material earmarked for delivery from warehouses -- rose to 14,550 tonnes from 6,975 tonnes the day before. LME lead stocks however, remain at highs not seen since October 2002 at 191,925 tonnes.
 

Key Words:  base metal  copper Cu  copper price 

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METALS-Copper Hits 7-1/2-month Low on Recovery Doubts

Industry News 09:04:17AM Jun 07, 2010 Source:SMM

NEW YORK/LONDON, June 4 (Reuters) - Base metals fell again for a fourth day on Friday, with copper hitting its lowest price since October 2009, after disappointing U.S. jobs data added to doubts about the global economy.

Zinc plunged to a 10-month low, nickel and tin hit their lowest in nearly four months, aluminum sank to a near eight-month low, and lead crumbled to its lowest in almost a year.

"There is a double-dip sort of feel out there, especially after the jobs number this morning," said Zachary Oxman, managing director with TrendMax Futures in Encinitas, California.

The U.S. Labor Department said nonfarm payrolls in May rose by 431,000, far below a consensus estimate for 513,000 new jobs. 

"The economy is just not recovering at the strength at which everybody is thinking. It's recovering at much slower pace, and the market is trying to re-price that," Oxman said.

Copper for July delivery HGN0 on the New York Mercantile Exchange's COMEX division sank 12.70 cents, or 4.3 percent, to settle at $2.8195 per lb, the lowest level on a closing basis for second-position contract since Oct. 13.

"We took out the February low ($2.8525), so contract-wise, we are basically at the lowest point since its been an active month," said Scott Meyers, senior trading analyst with Pioneer Futures in New York.

"I think we are on the tip of economic slowdown again ... we are going to see a period of time where there is going to be red flag after red flag, and there is just going to be concern," he said.

On the London Metal Exchange, benchmark copper for three-month delivery CMCU3 was last bid at $6,280 a tonne on the kerb, and fell to a late-session low at $6,235 per tonne, its lowest since Oct. 19.

Losses in the complex mounted in sympathy with a falling euro, which dropped below $1.20 versus the dollar for the first time in more than four years on fears Hungary could become the next casualty of the European debt crisis. [USD/]

A weak euro makes metals costly for European investors.

The market remained worried about demand in the world's top metals consumer after data this week pointed to a slower pace of manufacturing activity in China, analysts said. 

"China's economic growth has shifted into a lower gear following a very strong period in Q4-2009 and Q1-2010," Standard Chartered said in a note. "We expect China to slow over the next six months, but not dramatically."

FUNDAMENTALS IMPROVE

On the plus side, LME copper stocks, which indicate demand trends, fell 1,300 tonnes to 473,000 tonnes -- their lowest level since late December -- down from 6-1/2-year highs at 555,075 tonnes in mid February.

In other metals traded, aluminum CMAL3 ended at $1,881, down from $1,955, having hit its lowest since mid-October at $1,880. LME stocks for the metal, used in transport and packaging, shed 9,075 tonnes to 4.53 million tonnes.

Zinc CMZN3 ended at $1,641 a tonne, down from $1,740, having hit its lowest since late July at $1,646. Tin CMSN3 finished at $16,005, down from $17,650 after sinking nearly 10 percent to $16,000, its lowest since early February.

Nickel CMNI3 ended at $17,950, down from $18,700, having hit a near four-month low of $17,975, while lead CMPB3 ended at $1,607, down from $1,645, after hitting a near one year low at $1,591.

On Thursday, lead canceled warrants -- material earmarked for delivery from warehouses -- rose to 14,550 tonnes from 6,975 tonnes the day before. LME lead stocks however, remain at highs not seen since October 2002 at 191,925 tonnes.
 

Key Words:  base metal  copper Cu  copper price