METALS-Copper at 3-wk High on China Buying, Lower Stocks-Shanghai Metals Market

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METALS-Copper at 3-wk High on China Buying, Lower Stocks

Industry News 08:50:20AM Jul 22, 2010 Source:SMM

LONDON, July 21 (Reuters) - Copper rose to its highest in more than three-weeks on Wednesday due to strong physical and Chinese buying and falling inventories, but traders said economic growth worries were likely to keep a lid on prices.

Copper's rise lifted other industrial metals. Zinc climbed to a seven-week peak, while tin hit its highest since April 30. Battery-material lead saw a two-month high.

Benchmark copper for three-month delivery CMCU3 on the London Metal Exchange traded at $6,839 a tonne by 1441 GMT, from $6,637 on Tuesday. The metal, used in construction and wiring, earlier touched $6,874.75, its highest since June 28.

"There was Chinese buying overnight, which triggered this rise," RBC Capital Markets trader Randy North said. "It then pushed through some stop levels; $6,750 and then $6,800 and it's been technical buying and short-covering after that."

North said from a technical point of view, markets could go higher but he added: "Unless you see a serious tightening in the physical market or Euro up through 1.30, I just don't see how copper can sustain these kinds of levels."

Copper has been stuck in a range of around $6,300 to $6,900 since early June. "You've got this tussle between positive and negative, and as a consequence I see these things trade range bound," said analyst Daniel Brebner at Deutsche Bank.

Continuous stock drawdowns underpin prices, but unexpectedly poor economic data from the United States, like Tuesday's new U.S. home construction hitting an eight-month low, is capping further gains and clouding the demand prospects.

Reuters' mid-year metals price poll showed copper was expected to average $6,878 a tonne this year from $7,077 a tonne in the January poll. For aluminium the number was an unchanged $2,094 a tonne. 
 
STEADIER TONE

Metals did not take any support from the currency markets on Wednesday, where the euro EUR= slipped versus the dollar, making dollar-denominated metals more expensive for non-U.S. currency holders.[FRX/]

Investors also fretted over by data showing China's imports of refined copper fell for a third straight month in June. 

Copper stocks fell 1,975 tonnes to 417,625 tonnes, down from near seven-year highs at 555,075 tonnes hit in mid-February. Industry data showed, in the first four months of the year the copper market had moved into a deficit of 67,000 tonnes, from a 74,000 surplus in the same year-ago period. 

"We expect the firmer tone to continue through the balance of the week, as declining LME stocks, steadier equity markets...will all contribute to a steadier tone," MF Global said in a research note.

Aluminium CMAL3 traded at $1,995 versus $1,971. Zinc CMZN3 was last at $1,914.50 a tonne from $1,875 and tin CMSN3 was last bid at $18,370 from $18,240.

Steel-making ingredient nickel CMNI3 traded at $19,330 a tonne from $19,125, while lead CMPB3 gained to $1,864 from $1,837.
 

Key Words:  base metal  copper Cu  copper price 

METALS-Copper at 3-wk High on China Buying, Lower Stocks

Industry News 08:50:20AM Jul 22, 2010 Source:SMM

LONDON, July 21 (Reuters) - Copper rose to its highest in more than three-weeks on Wednesday due to strong physical and Chinese buying and falling inventories, but traders said economic growth worries were likely to keep a lid on prices.

Copper's rise lifted other industrial metals. Zinc climbed to a seven-week peak, while tin hit its highest since April 30. Battery-material lead saw a two-month high.

Benchmark copper for three-month delivery CMCU3 on the London Metal Exchange traded at $6,839 a tonne by 1441 GMT, from $6,637 on Tuesday. The metal, used in construction and wiring, earlier touched $6,874.75, its highest since June 28.

"There was Chinese buying overnight, which triggered this rise," RBC Capital Markets trader Randy North said. "It then pushed through some stop levels; $6,750 and then $6,800 and it's been technical buying and short-covering after that."

North said from a technical point of view, markets could go higher but he added: "Unless you see a serious tightening in the physical market or Euro up through 1.30, I just don't see how copper can sustain these kinds of levels."

Copper has been stuck in a range of around $6,300 to $6,900 since early June. "You've got this tussle between positive and negative, and as a consequence I see these things trade range bound," said analyst Daniel Brebner at Deutsche Bank.

Continuous stock drawdowns underpin prices, but unexpectedly poor economic data from the United States, like Tuesday's new U.S. home construction hitting an eight-month low, is capping further gains and clouding the demand prospects.

Reuters' mid-year metals price poll showed copper was expected to average $6,878 a tonne this year from $7,077 a tonne in the January poll. For aluminium the number was an unchanged $2,094 a tonne. 
 
STEADIER TONE

Metals did not take any support from the currency markets on Wednesday, where the euro EUR= slipped versus the dollar, making dollar-denominated metals more expensive for non-U.S. currency holders.[FRX/]

Investors also fretted over by data showing China's imports of refined copper fell for a third straight month in June. 

Copper stocks fell 1,975 tonnes to 417,625 tonnes, down from near seven-year highs at 555,075 tonnes hit in mid-February. Industry data showed, in the first four months of the year the copper market had moved into a deficit of 67,000 tonnes, from a 74,000 surplus in the same year-ago period. 

"We expect the firmer tone to continue through the balance of the week, as declining LME stocks, steadier equity markets...will all contribute to a steadier tone," MF Global said in a research note.

Aluminium CMAL3 traded at $1,995 versus $1,971. Zinc CMZN3 was last at $1,914.50 a tonne from $1,875 and tin CMSN3 was last bid at $18,370 from $18,240.

Steel-making ingredient nickel CMNI3 traded at $19,330 a tonne from $19,125, while lead CMPB3 gained to $1,864 from $1,837.
 

Key Words:  base metal  copper Cu  copper price