LME Copper Edges Lower After China Trade Data-Shanghai Metals Market

Hot Keywords

  • Inventory data
  • Zinc
  • Production data
  • Market commentary
  • Macroeconomics
  • Morning comments
  • Futures movement
  • NPI
  • Copper
  • Aluminium
  • Nickel
  • Nickel ore
  • In the United States
  • trade negotiations
  • nickel laterite

LME Copper Edges Lower After China Trade Data

Industry News 02:54:57PM Jul 10, 2012 Source:SMM

SHANGHAI, July 10 (Reuters) - London copper edged down on Tuesday, weighed down by a 17.5 percent monthly fall in China's June copper imports, global economic worries and caution ahead of the release of China's GDP figures this week.

But some saw a silver lining in recent gloomy data and price falls, hoping these will lead to more stimulus moves by central banks, while others bet that copper prices have bottomed out.

Three-month copper on the London Metal Exchange had edged down 0.2 percent to $7,547.50 per tonne by 0419 GMT, after rising 0.4 percent on Monday.

The most-active October copper contract on the Shanghai Futures Exchange edged up 0.3 percent to 55,360 yuan ($8,700) per tonne, catching up with previous gains in London, after losing 1 percent on Monday.

Tuesday's trade data showed China's imports of copper fell 17.5 percent to 346,223 tonnes in June, from 419,741 tonnes in the previous month.

"Base metal prices have held up well today despite the dismal China import figures, as many believe such data will help push central banks towards more stimulus policies soon. This means there isn't much downside room for metals from here," said a Shanghai-based trader with an international firm.

Stimulus hopes were also stirred by recent comments from central bankers. Three top U.S. Federal Reserve policymakers called for more quantitative easing, while European Central Bank President Mario Draghi said the bank may cut interest rates again if economic data supported the move.
 
Recent data from the Commodity Futures Trading Commission (CFTC)'s Commitments of Traders showed speculators sharply cut their copper net shorts after prices rallied more than 5 percent in the week up to July 3, indicating more investors believe that copper prices have bottomed out.

Macquarie Commodities Research analyst Bonnie Liu said she was seeing budding signs of improving demand in top consumer China, particularly among large copper fabricators that were receiving more orders from state grid construction.

"I think Chinese demand has bottomed out and has started to improve since May, led by government infrastructure spending. The price outlook is comfortable for the second half from recent lows seen in June," she said.

But despite cautious optimism among some market players, trading will likely stay within a narrow range in the session as investors await more trading cues from China's GDP figures  due this week, while eyeing worrying signs from the euro zone.
 
France's economy flatlined in the first half of 2012, Greece's economy is forecast to fall a steeper-than-expected 6.9 percent this year, while European leaders still have not finalised details of plans to rescue Spain.
  
"With so much global economic uncertainty, there may be limited upside room in base metal prices, especially in aluminium and zinc due to overcapacity as producers will likely sell when prices rise," said the trader.

In industry news, Asia-Pacific-based miner OceanaGold signed an initial long-term contract to sell copper concentrate from its Didipio project in northern Luzon, Philippines, to trading firm Trafigura AG. The project is slated to produce 100,000 ounces of gold and 14,000 tonnes of copper per year over an estimated 16-year mine life.
 
More than $200 million in customer funds appears to be missing from the accounts of U.S. futures broker PFGBest, regulators said on Monday, just hours after the firm's founder attempted suicide. The news renewed anxiety over the stability of the brokerage industry less than a year after the collapse of much larger MF Global.
                                                                
Base metals prices at 0419 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7547.50    -12.50     -0.17     -0.69
  SHFE CU FUT OCT2    55360       180     +0.33     -0.49
  LME Alum          1920.00     -5.00     -0.26     -4.95
  SHFE AL FUT OCT2    15590        55     +0.35     -1.58
  HG COPPER SEP2     342.15     -1.00     -0.29     -0.42
  LME Zinc          1855.00      1.00     +0.05      0.54
  SHFE ZN FUT OCT2    14735        40     +0.27     -0.41
  LME Nickel       16330.00    -70.00     -0.43    -12.72
  LME Lead          1875.00     -3.00     -0.16     -7.86
  SHFE PB FUT         14920        80     +0.54     -2.42
  LME Tin          18700.00    -95.00     -0.51     -2.60
  LME/Shanghai arb     865
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
 ($1 = 6.3714 Chinese yuan)

 

LME Copper Edges Lower After China Trade Data

Industry News 02:54:57PM Jul 10, 2012 Source:SMM

SHANGHAI, July 10 (Reuters) - London copper edged down on Tuesday, weighed down by a 17.5 percent monthly fall in China's June copper imports, global economic worries and caution ahead of the release of China's GDP figures this week.

But some saw a silver lining in recent gloomy data and price falls, hoping these will lead to more stimulus moves by central banks, while others bet that copper prices have bottomed out.

Three-month copper on the London Metal Exchange had edged down 0.2 percent to $7,547.50 per tonne by 0419 GMT, after rising 0.4 percent on Monday.

The most-active October copper contract on the Shanghai Futures Exchange edged up 0.3 percent to 55,360 yuan ($8,700) per tonne, catching up with previous gains in London, after losing 1 percent on Monday.

Tuesday's trade data showed China's imports of copper fell 17.5 percent to 346,223 tonnes in June, from 419,741 tonnes in the previous month.

"Base metal prices have held up well today despite the dismal China import figures, as many believe such data will help push central banks towards more stimulus policies soon. This means there isn't much downside room for metals from here," said a Shanghai-based trader with an international firm.

Stimulus hopes were also stirred by recent comments from central bankers. Three top U.S. Federal Reserve policymakers called for more quantitative easing, while European Central Bank President Mario Draghi said the bank may cut interest rates again if economic data supported the move.
 
Recent data from the Commodity Futures Trading Commission (CFTC)'s Commitments of Traders showed speculators sharply cut their copper net shorts after prices rallied more than 5 percent in the week up to July 3, indicating more investors believe that copper prices have bottomed out.

Macquarie Commodities Research analyst Bonnie Liu said she was seeing budding signs of improving demand in top consumer China, particularly among large copper fabricators that were receiving more orders from state grid construction.

"I think Chinese demand has bottomed out and has started to improve since May, led by government infrastructure spending. The price outlook is comfortable for the second half from recent lows seen in June," she said.

But despite cautious optimism among some market players, trading will likely stay within a narrow range in the session as investors await more trading cues from China's GDP figures  due this week, while eyeing worrying signs from the euro zone.
 
France's economy flatlined in the first half of 2012, Greece's economy is forecast to fall a steeper-than-expected 6.9 percent this year, while European leaders still have not finalised details of plans to rescue Spain.
  
"With so much global economic uncertainty, there may be limited upside room in base metal prices, especially in aluminium and zinc due to overcapacity as producers will likely sell when prices rise," said the trader.

In industry news, Asia-Pacific-based miner OceanaGold signed an initial long-term contract to sell copper concentrate from its Didipio project in northern Luzon, Philippines, to trading firm Trafigura AG. The project is slated to produce 100,000 ounces of gold and 14,000 tonnes of copper per year over an estimated 16-year mine life.
 
More than $200 million in customer funds appears to be missing from the accounts of U.S. futures broker PFGBest, regulators said on Monday, just hours after the firm's founder attempted suicide. The news renewed anxiety over the stability of the brokerage industry less than a year after the collapse of much larger MF Global.
                                                                
Base metals prices at 0419 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7547.50    -12.50     -0.17     -0.69
  SHFE CU FUT OCT2    55360       180     +0.33     -0.49
  LME Alum          1920.00     -5.00     -0.26     -4.95
  SHFE AL FUT OCT2    15590        55     +0.35     -1.58
  HG COPPER SEP2     342.15     -1.00     -0.29     -0.42
  LME Zinc          1855.00      1.00     +0.05      0.54
  SHFE ZN FUT OCT2    14735        40     +0.27     -0.41
  LME Nickel       16330.00    -70.00     -0.43    -12.72
  LME Lead          1875.00     -3.00     -0.16     -7.86
  SHFE PB FUT         14920        80     +0.54     -2.42
  LME Tin          18700.00    -95.00     -0.51     -2.60
  LME/Shanghai arb     865
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
 ($1 = 6.3714 Chinese yuan)