METALS-Copper Mixed after Data Stirs Recovery Worries-Shanghai Metals Market

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METALS-Copper Mixed after Data Stirs Recovery Worries

Industry News 09:14:39AM Jul 16, 2010 Source:SMM

NEW YORK/LONDON, July 15 (Reuters) - Copper was mixed in late trade on Thursday, as investors dissected a batch of data from China and the United States, that offered conflicting views about near-term economic and demand prospects.

Copper for September delivery HGU0 on the COMEX metals division of the New York Mercantile Exchange rose 0.35 cent to end at $3.0120 per lb, after dealing between $2.9870 and $3.0450.

On the London Metal Exchange, benchmark copper for three-months delivery CMCU3 shed $45 to end at $6,680 a tonne.

The day began with annual economic growth data in top metals consumer China, which eased to 10.3 percent in the second quarter from 11.9 percent in the first quarter.

While a touch weaker than market expectations, it failed to raise additional fears of a steeper slowdown in the metals giant.

"China is still doing well ... talk of china slowing down has pretty much been discounted," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

The data also showed inflation at the producer and consumer level eased in June from May, reducing the need for further policy tightening. 

"I think a lot of people are beginning to look forward to the fact that some of the measures that China took to slow things down will be eliminated. Looking at the fourth quarter and into the first quarter of next year, I think people are looking positively to China," he said.

One day after minutes of the U.S. Federal Reserve's June meeting revealed a more cautious economic outlook, macro data underscored that softer view.

The rate of growth in the factory sector slowed sharply in July, and U.S. wholesale prices fell for a third straight month, adding to evidence that the U.S. economic recovery is losing steam.

"The PPI falling in June -- that's the third straight month -- that was more than was expected. This all fits in very much with the fact that we're not getting traction in the U.S. and that means a slower demand trajectory," said Nick Moore, global head of commodity strategy at RBS Global Banking & Markets.

The softer macro data dragged the U.S. dollar to a two-month low against the euro, limiting the red metal's downside, as a weaker dollar tends to make dollar-priced metals cheaper for non-European investors. [USD/]

PRODUCTION

Also from China, data showed production of refined copper rose 6 percent on the month in June to a record, as smelters boosted production to meet first-half output targets.

"The still very high production rates of metals, which have not yet declined significantly compared to the previous month, point towards declining imports during the course of the year. This might strain metal prices," said Commerzbank in a note.

Among other industrial metals, aluminum CMAL3 ended up $13 at $2,018 a tonne.

Primary aluminum production in China dropped 0.7 percent in June from May's record 1.416 million tonnes, following production cuts by some smelters due to low prices and tighter government controls over outdated facilities.

Aluminum remains in oversupply, with latest data showing LME stocks total a hefty 4.38 million tonnes, although back from recent record levels at around 4.6 million tonnes.

Zinc CMZN3 slipped $40 to end at $1,810 a tonne, while tin CMSN3 and nickel CMNI3 were unchanged at $17,950 and $19,400, respectively.

Lead CMPB3 was untraded at the close but last bid at $1,798 from $1,826

The global lead market was in surplus by 34,000 tonnes in the first five months of the year, while the global zinc market was in surplus by 209,000 tonnes, data from the International Lead and Zinc Study Group's (ILZSG) latest monthly bulletin showed.
 

Key Words:  base metal  LME market 

METALS-Copper Mixed after Data Stirs Recovery Worries

Industry News 09:14:39AM Jul 16, 2010 Source:SMM

NEW YORK/LONDON, July 15 (Reuters) - Copper was mixed in late trade on Thursday, as investors dissected a batch of data from China and the United States, that offered conflicting views about near-term economic and demand prospects.

Copper for September delivery HGU0 on the COMEX metals division of the New York Mercantile Exchange rose 0.35 cent to end at $3.0120 per lb, after dealing between $2.9870 and $3.0450.

On the London Metal Exchange, benchmark copper for three-months delivery CMCU3 shed $45 to end at $6,680 a tonne.

The day began with annual economic growth data in top metals consumer China, which eased to 10.3 percent in the second quarter from 11.9 percent in the first quarter.

While a touch weaker than market expectations, it failed to raise additional fears of a steeper slowdown in the metals giant.

"China is still doing well ... talk of china slowing down has pretty much been discounted," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

The data also showed inflation at the producer and consumer level eased in June from May, reducing the need for further policy tightening. 

"I think a lot of people are beginning to look forward to the fact that some of the measures that China took to slow things down will be eliminated. Looking at the fourth quarter and into the first quarter of next year, I think people are looking positively to China," he said.

One day after minutes of the U.S. Federal Reserve's June meeting revealed a more cautious economic outlook, macro data underscored that softer view.

The rate of growth in the factory sector slowed sharply in July, and U.S. wholesale prices fell for a third straight month, adding to evidence that the U.S. economic recovery is losing steam.

"The PPI falling in June -- that's the third straight month -- that was more than was expected. This all fits in very much with the fact that we're not getting traction in the U.S. and that means a slower demand trajectory," said Nick Moore, global head of commodity strategy at RBS Global Banking & Markets.

The softer macro data dragged the U.S. dollar to a two-month low against the euro, limiting the red metal's downside, as a weaker dollar tends to make dollar-priced metals cheaper for non-European investors. [USD/]

PRODUCTION

Also from China, data showed production of refined copper rose 6 percent on the month in June to a record, as smelters boosted production to meet first-half output targets.

"The still very high production rates of metals, which have not yet declined significantly compared to the previous month, point towards declining imports during the course of the year. This might strain metal prices," said Commerzbank in a note.

Among other industrial metals, aluminum CMAL3 ended up $13 at $2,018 a tonne.

Primary aluminum production in China dropped 0.7 percent in June from May's record 1.416 million tonnes, following production cuts by some smelters due to low prices and tighter government controls over outdated facilities.

Aluminum remains in oversupply, with latest data showing LME stocks total a hefty 4.38 million tonnes, although back from recent record levels at around 4.6 million tonnes.

Zinc CMZN3 slipped $40 to end at $1,810 a tonne, while tin CMSN3 and nickel CMNI3 were unchanged at $17,950 and $19,400, respectively.

Lead CMPB3 was untraded at the close but last bid at $1,798 from $1,826

The global lead market was in surplus by 34,000 tonnes in the first five months of the year, while the global zinc market was in surplus by 209,000 tonnes, data from the International Lead and Zinc Study Group's (ILZSG) latest monthly bulletin showed.
 

Key Words:  base metal  LME market