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Copper Up on Greek Hopes, China Stimulus

Industry News 08:54:12AM May 29, 2012 Source:SMM

LONDON, May 28 (Reuters) - Copper edged higher on Monday on hopes of more stimulus from China, and after Greek conservative parties topped opinion polls, helping calm fears over contagion should Athens default on its debt and leave the euro. 

A conservative victory on June 17 would raise the odds that Athens will form a government that would agree to harsh bailout terms by the European Union and the International Monetary Fund, enabling it to stay in the currency club.   

But risks remain high, as Spain is said to be considering issuing more debt to recapitalise its fourth-largest lender, Bankia.   

In China meanwhile, copper got support from news that Beijing may subsidise vehicle purchases in rural areas, the latest of a number of moves signalling the Chinese government's attempts to stimulate the economy. 
 
Three-month copper on the London Metal Exchange rose 0.65 percent to close at $7,689 a tonne from $7,639 on Friday, with volumes expected to remain light given public holidays in Europe and the U.S.  

Copper prices have dropped more than 8 percent this month alone, with demand prospects glum not just in Europe, but in China, which accounts for around 40 percent of the world's copper consumption. 

"The market is taking a breather after two weeks of heavy losses. There is a bit of optimism as polls showed the pro-bailout party is ahead in Greece but I am sceptical," said VTB Capital analyst Andrey Kryuchenkov. 

"I can't see a sustained recovery. My guess is that copper is going to hold at $7,000-7,800 until there is more news about Greece and more economic data." 

Surveys showed on Saturday Greece's conservatives have regained an opinion poll lead that would allow the formation of a government committed to keeping the country in the euro zone.   
But the euro zone remains a wild card to many investors, who worry that debt problems there will worsen and further crimp the region's demand for copper and other commodities. 
  
German central bank chief Jens Weidmann dismissed French-backed calls for the use of joint euro bonds to boost economic growth in Europe. He said in an interview in French newspaper Le Monde that "this debate irritates me a bit."
   
Questions Over Chinese Subsidies
In China, a Qingdao-based copper buyer said until more details were released on various investments and subsidies by Beijing, investors would wonder how these would stimulate domestic consumption in the longer term.   

"The earmarked investments and subsidies will create more demand for metals in the short term, but it remains to be seen how these projects will stimulate domestic consumption and help China restructure its economy, and if it will improve liquidity or just increase debt held by local governments," he said.   

On a fundamental level though, copper remained in short supply, with the global market in a 110,000-tonne deficit in February, the International Copper Study Group (ICSG) said last week.   
In industry news, the incoming CEO of Codelco has signalled there will be no change in the Chilean state copper giant's attitude toward its right to acquire 49 percent of Anglo American Plc's assets in south-central Chile.  

Also, the world's No. 3 copper mine, Chile's Collahuasi, is gradually resuming mining operations following the accidental death of a worker late Saturday, spokeswoman Bernardita Fernandez told Reuters on Sunday.
  
In other metals, soldering material tin closed at $19,795 a tonne from $19,750, while zinc, used in galvanising, ended at $1,910 from $1,908.50. 

Battery material lead finished at $1,941.50 versus $1,950, aluminium at $2,022 from $2,013.50, and stainless-steel ingredient nickel was at $17,000 from $17,050.   
     
 Metal Prices at 1625 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2011   Ytd Pct
                                                              move
  COMEX Cu       347.15        2.35     +0.68     344.75      0.70
  LME Alum      2025.00       11.50     +0.57    2020.00      0.25
  LME Cu        7678.00       39.00     +0.51    7600.00      1.03
  LME Lead      1941.00       -9.00     -0.46    2034.00     -4.57
  LME Nickel   16981.00      -69.00     -0.40   18650.00     -8.95
  LME Tin      19715.00     -255.00     -1.28   19200.00      2.68
  LME Zinc      1905.25       -3.25     -0.17    1845.00      3.27
  SHFE Alu     16035.00       15.00     +0.09   15845.00      1.20
  SHFE Cu*     56450.00      840.00     +1.51   55360.00      1.97
  SHFE Zin     14960.00      195.00     +1.32   14795.00      1.12
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
 

Key Words:  copper Monday  

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Copper Up on Greek Hopes, China Stimulus

Industry News 08:54:12AM May 29, 2012 Source:SMM

LONDON, May 28 (Reuters) - Copper edged higher on Monday on hopes of more stimulus from China, and after Greek conservative parties topped opinion polls, helping calm fears over contagion should Athens default on its debt and leave the euro. 

A conservative victory on June 17 would raise the odds that Athens will form a government that would agree to harsh bailout terms by the European Union and the International Monetary Fund, enabling it to stay in the currency club.   

But risks remain high, as Spain is said to be considering issuing more debt to recapitalise its fourth-largest lender, Bankia.   

In China meanwhile, copper got support from news that Beijing may subsidise vehicle purchases in rural areas, the latest of a number of moves signalling the Chinese government's attempts to stimulate the economy. 
 
Three-month copper on the London Metal Exchange rose 0.65 percent to close at $7,689 a tonne from $7,639 on Friday, with volumes expected to remain light given public holidays in Europe and the U.S.  

Copper prices have dropped more than 8 percent this month alone, with demand prospects glum not just in Europe, but in China, which accounts for around 40 percent of the world's copper consumption. 

"The market is taking a breather after two weeks of heavy losses. There is a bit of optimism as polls showed the pro-bailout party is ahead in Greece but I am sceptical," said VTB Capital analyst Andrey Kryuchenkov. 

"I can't see a sustained recovery. My guess is that copper is going to hold at $7,000-7,800 until there is more news about Greece and more economic data." 

Surveys showed on Saturday Greece's conservatives have regained an opinion poll lead that would allow the formation of a government committed to keeping the country in the euro zone.   
But the euro zone remains a wild card to many investors, who worry that debt problems there will worsen and further crimp the region's demand for copper and other commodities. 
  
German central bank chief Jens Weidmann dismissed French-backed calls for the use of joint euro bonds to boost economic growth in Europe. He said in an interview in French newspaper Le Monde that "this debate irritates me a bit."
   
Questions Over Chinese Subsidies
In China, a Qingdao-based copper buyer said until more details were released on various investments and subsidies by Beijing, investors would wonder how these would stimulate domestic consumption in the longer term.   

"The earmarked investments and subsidies will create more demand for metals in the short term, but it remains to be seen how these projects will stimulate domestic consumption and help China restructure its economy, and if it will improve liquidity or just increase debt held by local governments," he said.   

On a fundamental level though, copper remained in short supply, with the global market in a 110,000-tonne deficit in February, the International Copper Study Group (ICSG) said last week.   
In industry news, the incoming CEO of Codelco has signalled there will be no change in the Chilean state copper giant's attitude toward its right to acquire 49 percent of Anglo American Plc's assets in south-central Chile.  

Also, the world's No. 3 copper mine, Chile's Collahuasi, is gradually resuming mining operations following the accidental death of a worker late Saturday, spokeswoman Bernardita Fernandez told Reuters on Sunday.
  
In other metals, soldering material tin closed at $19,795 a tonne from $19,750, while zinc, used in galvanising, ended at $1,910 from $1,908.50. 

Battery material lead finished at $1,941.50 versus $1,950, aluminium at $2,022 from $2,013.50, and stainless-steel ingredient nickel was at $17,000 from $17,050.   
     
 Metal Prices at 1625 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2011   Ytd Pct
                                                              move
  COMEX Cu       347.15        2.35     +0.68     344.75      0.70
  LME Alum      2025.00       11.50     +0.57    2020.00      0.25
  LME Cu        7678.00       39.00     +0.51    7600.00      1.03
  LME Lead      1941.00       -9.00     -0.46    2034.00     -4.57
  LME Nickel   16981.00      -69.00     -0.40   18650.00     -8.95
  LME Tin      19715.00     -255.00     -1.28   19200.00      2.68
  LME Zinc      1905.25       -3.25     -0.17    1845.00      3.27
  SHFE Alu     16035.00       15.00     +0.09   15845.00      1.20
  SHFE Cu*     56450.00      840.00     +1.51   55360.00      1.97
  SHFE Zin     14960.00      195.00     +1.32   14795.00      1.12
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
 

Key Words:  copper Monday