Copper Falls on US Stimulus Uncertainty, China Data Worries

Industry News 10:06:10AM Jun 08, 2012 Source:SMM

SHANGHAI, June 8 (Reuters) - Copper fell on Friday after the U.S. Federal Reserve's chairman gave no hint that further monetary easing was imminent, disappointing those hoping that more stimulus by the world's largest economy would help boost global commodity prices. 

Investors also began to worry that a decision on Thursday to cut rates in China, the world's top metals consumer, signaled grim economic data is on the cards. 
     
Fundamentals
Three-month copper on the London Metal Exchange dipped 1.6 percent to $7,376 a tonne by 0105 GMT, after rising 1.1 percent in the prior session. It remains on track to gain 0.2 percent on the week. 

The most-active September copper contract on the Shanghai Futures Exchange fell 0.5 percent to 53,400 yuan($8,400) a tonne, after dropping 0.3 percent the session before. It looks set to end the week 2 percent lower. 

Fed Chairman Ben Bernanke said on Thursday the U.S. central bank was ready to shield the economy if financial troubles mount but offered few hints that further monetary stimulus was imminent.  

China delivered twin surprises on interest rates on Thursday, cutting borrowing costs to combat faltering growth while giving banks additional flexibility to set competitive lending and deposit rates in a step along the path of liberalisation. 
   
But the central bank's cut, the first since the global financial crisis in late 2008, has also raised concerns about a deluge of May Chinese data due this weekend, with Asian shares losing ground on Friday.  

Fitch Ratings cut its rating on Spain's government debt by three notches to 'BBB' on Thursday and signalled it could lower it further by putting the country on negative outlook.
  
Chancellor Angela Merkel said Europe was ready to act to ensure stability in the euro zone, however.  
         
Market News 
Asian shares edged lower on Friday, while the euro and commodity currencies nursed modest losses.   
         
    DATA/EVENTS (GMT) 
0600  Germany Trade data             Apr  
0800  Italy   Industrial output yy   Apr         
1230  U.S.    International trade    Apr            
1400  U.S.    Wholesale inventories  Apr            
1930  U.S.    CFTC commitment of traders data  
     
                                                              
  Base metals prices at 0105 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7376.00   -119.00     -1.59     -2.95
  SHFE CU FUT SEP2    53400      -240     -0.45     -4.01
  LME Alum          1982.25     -9.75     -0.49     -1.87
  SHFE AL FUT SEP2    15875       -15     -0.09      0.22
  HG COPPER JUL2     333.15     -3.90     -1.16     -3.04
  LME Zinc          1884.25    -24.75     -1.30      2.13
  SHFE ZN FUT SEP2    14740        20     +0.14     -0.37
  LME Nickel       16360.00   -235.00     -1.42    -12.56
  LME Lead          1914.00     -3.00     -0.16     -5.95
  SHFE PB FUT            0    -15050   -100.00   -100.00
  LME Tin          19950.00      0.00     +0.00      3.91
  LME/Shanghai arb    1226
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
                                                              
 ($1 = 6.3635 Chinese yuan) 
 

Copper Falls on US Stimulus Uncertainty, China Data Worries

Industry News 10:06:10AM Jun 08, 2012 Source:SMM

SHANGHAI, June 8 (Reuters) - Copper fell on Friday after the U.S. Federal Reserve's chairman gave no hint that further monetary easing was imminent, disappointing those hoping that more stimulus by the world's largest economy would help boost global commodity prices. 

Investors also began to worry that a decision on Thursday to cut rates in China, the world's top metals consumer, signaled grim economic data is on the cards. 
     
Fundamentals
Three-month copper on the London Metal Exchange dipped 1.6 percent to $7,376 a tonne by 0105 GMT, after rising 1.1 percent in the prior session. It remains on track to gain 0.2 percent on the week. 

The most-active September copper contract on the Shanghai Futures Exchange fell 0.5 percent to 53,400 yuan($8,400) a tonne, after dropping 0.3 percent the session before. It looks set to end the week 2 percent lower. 

Fed Chairman Ben Bernanke said on Thursday the U.S. central bank was ready to shield the economy if financial troubles mount but offered few hints that further monetary stimulus was imminent.  

China delivered twin surprises on interest rates on Thursday, cutting borrowing costs to combat faltering growth while giving banks additional flexibility to set competitive lending and deposit rates in a step along the path of liberalisation. 
   
But the central bank's cut, the first since the global financial crisis in late 2008, has also raised concerns about a deluge of May Chinese data due this weekend, with Asian shares losing ground on Friday.  

Fitch Ratings cut its rating on Spain's government debt by three notches to 'BBB' on Thursday and signalled it could lower it further by putting the country on negative outlook.
  
Chancellor Angela Merkel said Europe was ready to act to ensure stability in the euro zone, however.  
         
Market News 
Asian shares edged lower on Friday, while the euro and commodity currencies nursed modest losses.   
         
    DATA/EVENTS (GMT) 
0600  Germany Trade data             Apr  
0800  Italy   Industrial output yy   Apr         
1230  U.S.    International trade    Apr            
1400  U.S.    Wholesale inventories  Apr            
1930  U.S.    CFTC commitment of traders data  
     
                                                              
  Base metals prices at 0105 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7376.00   -119.00     -1.59     -2.95
  SHFE CU FUT SEP2    53400      -240     -0.45     -4.01
  LME Alum          1982.25     -9.75     -0.49     -1.87
  SHFE AL FUT SEP2    15875       -15     -0.09      0.22
  HG COPPER JUL2     333.15     -3.90     -1.16     -3.04
  LME Zinc          1884.25    -24.75     -1.30      2.13
  SHFE ZN FUT SEP2    14740        20     +0.14     -0.37
  LME Nickel       16360.00   -235.00     -1.42    -12.56
  LME Lead          1914.00     -3.00     -0.16     -5.95
  SHFE PB FUT            0    -15050   -100.00   -100.00
  LME Tin          19950.00      0.00     +0.00      3.91
  LME/Shanghai arb    1226
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
                                                              
 ($1 = 6.3635 Chinese yuan)