Copper Eases As China Buyers Out for the Count

Industry News 01:26:45PM Feb 07, 2012 Source:SMM

SHANGHAI, Feb 7 (Reuters) - London copper slipped on Tuesday on sluggish post-holiday purchases from top consumer China but investors betting on a bailout deal for Greece, and growing hopes of a global economic recovery, buttressed prices.   

Three-month copper on the London Metal Exchange fell 0.37 percent to $8,462.75 a tonne by 0503 GMT, clawing back some losses from the previous session when it slipped by almost one percent. Copper hit a one week-high of $8,598.50 on Friday and rose for the fourth consecutive week last week.  
   
The most-traded April copper contract on the Shanghai Futures Exchange (ShFE) edged down 0.73 percent to 60,090 yuan a tonne.   
    
"It's all Greek related right now, there's nothing fundamentally to move the markets in terms of Chinese demand," U.S.-based analyst Ed Meir of INTL-FC Stone said.   

"Markets will discount some sort of agreement and the firmer tone will probably carry on until we have the next big shoe drop-- the Chinese trade data for January could be significant," he added.   

German Chancellor Angela Merkel told Greece on Monday to make up its mind fast on accepting the painful terms for a new EU/IMF bailout, but the country's political leaders responded by delaying their decision for yet another day.
   
On the demand side, Chinese trade data is due later this week, with markets keeping a close eye on copper imports which hit a record high in December, when arbitrage and financing opportunities burnished the metal's appeal.   

China is the world's largest copper consumer, and monthly import figures have been climbing since June 2011.
    
But imports are expected to be weaker in January in part due to Lunar New Year holidays and as slower manufacturing weakened demand. How much weaker will be a key point watched by the market, given signs of sluggish post-holiday consumption.   

"It's all very dull. The spreads are still rubbish, the arb is well and truly closed. Premiums are soft," a trader at a Western bank based in Singapore said.   

The trader was talking about the ShFE copper forward curve, where front month prices remain at a steep discount to third month prices, and the price differential between LME and SHFE copper, which makes imports unprofitable at the moment.        

Analysts also said a lack of consumer interest added to any fresh worries over European debt could fuel a correction in prices which many believe have outrun fundamentals for now.   

"The latest data from the Shanghai Futures Exchange showed that inventories have continued to increase rapidly and physical premiums are easing as well," Credit Suisse Private Banking said in a note.    

"Sentiment could turn out to be fairly shaky in the days ahead."   

In metals news, Rio Tinto's lockout of workers at its Alcan division's big Alma aluminum smelter in northern Quebec looks set to drag on, and the company said on Monday that no talks were scheduled.    
       
       PRICES       
                                                             
  Base metals prices at 0503 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8462.75    -37.25     -0.44     11.35
  SHFE CU FUT APR2    60090      -440     -0.73      8.54
  HG COPPER MAR2     384.45     -2.05     -0.52     11.89
  LME Alum          2216.00     -6.00     -0.27      9.70
  SHFE AL FUT APR2    16175       -40     -0.25      2.08
  LME Zinc          2115.00    -16.00     -0.75     14.63
  SHFE ZN FUT APR2    15985      -210     -1.30      8.04
  LME Nickel       21490.00   -205.00     -0.94     14.86
  LME Lead          2175.00     -6.00     -0.28      6.88
  SHFE PB FUT      16100.00   -145.00     -0.89      5.33
  LME Tin          24305.00   -195.00     -0.80     26.59
  LME/Shanghai arb^    2353
 
   Shanghai and COMEX contracts show most active months 




 

Key Words:  London copper 

Copper Eases As China Buyers Out for the Count

Industry News 01:26:45PM Feb 07, 2012 Source:SMM

SHANGHAI, Feb 7 (Reuters) - London copper slipped on Tuesday on sluggish post-holiday purchases from top consumer China but investors betting on a bailout deal for Greece, and growing hopes of a global economic recovery, buttressed prices.   

Three-month copper on the London Metal Exchange fell 0.37 percent to $8,462.75 a tonne by 0503 GMT, clawing back some losses from the previous session when it slipped by almost one percent. Copper hit a one week-high of $8,598.50 on Friday and rose for the fourth consecutive week last week.  
   
The most-traded April copper contract on the Shanghai Futures Exchange (ShFE) edged down 0.73 percent to 60,090 yuan a tonne.   
    
"It's all Greek related right now, there's nothing fundamentally to move the markets in terms of Chinese demand," U.S.-based analyst Ed Meir of INTL-FC Stone said.   

"Markets will discount some sort of agreement and the firmer tone will probably carry on until we have the next big shoe drop-- the Chinese trade data for January could be significant," he added.   

German Chancellor Angela Merkel told Greece on Monday to make up its mind fast on accepting the painful terms for a new EU/IMF bailout, but the country's political leaders responded by delaying their decision for yet another day.
   
On the demand side, Chinese trade data is due later this week, with markets keeping a close eye on copper imports which hit a record high in December, when arbitrage and financing opportunities burnished the metal's appeal.   

China is the world's largest copper consumer, and monthly import figures have been climbing since June 2011.
    
But imports are expected to be weaker in January in part due to Lunar New Year holidays and as slower manufacturing weakened demand. How much weaker will be a key point watched by the market, given signs of sluggish post-holiday consumption.   

"It's all very dull. The spreads are still rubbish, the arb is well and truly closed. Premiums are soft," a trader at a Western bank based in Singapore said.   

The trader was talking about the ShFE copper forward curve, where front month prices remain at a steep discount to third month prices, and the price differential between LME and SHFE copper, which makes imports unprofitable at the moment.        

Analysts also said a lack of consumer interest added to any fresh worries over European debt could fuel a correction in prices which many believe have outrun fundamentals for now.   

"The latest data from the Shanghai Futures Exchange showed that inventories have continued to increase rapidly and physical premiums are easing as well," Credit Suisse Private Banking said in a note.    

"Sentiment could turn out to be fairly shaky in the days ahead."   

In metals news, Rio Tinto's lockout of workers at its Alcan division's big Alma aluminum smelter in northern Quebec looks set to drag on, and the company said on Monday that no talks were scheduled.    
       
       PRICES       
                                                             
  Base metals prices at 0503 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8462.75    -37.25     -0.44     11.35
  SHFE CU FUT APR2    60090      -440     -0.73      8.54
  HG COPPER MAR2     384.45     -2.05     -0.52     11.89
  LME Alum          2216.00     -6.00     -0.27      9.70
  SHFE AL FUT APR2    16175       -40     -0.25      2.08
  LME Zinc          2115.00    -16.00     -0.75     14.63
  SHFE ZN FUT APR2    15985      -210     -1.30      8.04
  LME Nickel       21490.00   -205.00     -0.94     14.86
  LME Lead          2175.00     -6.00     -0.28      6.88
  SHFE PB FUT      16100.00   -145.00     -0.89      5.33
  LME Tin          24305.00   -195.00     -0.80     26.59
  LME/Shanghai arb^    2353
 
   Shanghai and COMEX contracts show most active months 




 

Key Words:  London copper