Copper Steady As Global Macro Signals Improve-Shanghai Metals Market

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Copper Steady As Global Macro Signals Improve

Industry News 08:37:27AM Jan 22, 2013 Source:SMM

LONDON, Jan 21 (Reuters) - Copper was little changed in thin trade on Monday as a political attempt to break a budget impasse in the United States revived risk appetite, but was offset by still weak physical demand from top consumer China.

Three-month copper on the London Metal Exchange edged down 0.1 percent to close at $8,055 a tonne in low volumes due to a U.S. market holiday for Martin Luther King day.

Copper volume was 4,764 lots by the close of floor trading, compared to an average daily volume of 13,081 over the past two months. Copper hit a one-week high of $8,130 a tonne in the previous session before closing the week more or less unchanged.

U.S. House Republican leaders said on Monday they would seek to pass a four-month extension of federal borrowing authority on Wednesday to buy time for the Democrat-controlled Senate to pass a plan to shrink budget deficits.
 
European shares, seen by some as a proxy for growth, inched towards two-year highs in response on Monday, but investors were more cautious about sending copper to new highs given Chinese physical metal buying remains weak.

Data out earlier showed imports of refined copper by China, which consumes some 40 percent of the world's supplies of the metal, dropped 4.7 percent in December from November, though they were up 20 percent for 2012 as a whole.
 
"On the macro side base metals have even in the short term a bullish scenario, what is holding them back is actually the physical market. Many people say we have to wait until after the Chinese new year and probably they're right," said Gianclaudio Torlizzi, partner at metals consultancy T-Commodity.

"I'm not that worried about the general level of stocks (in China) because there's big question marks about availability of these stocks," he added.

The Chinese trade data also showed exports of refined copper surged 75.3 percent to a record 274,014 tonnes in 2012.

"Given the current overhang of Chinese bonded inventory, and recent changes in terms of tax environment and the granting of export licences, higher levels of Chinese refined exports are likely to remain a feature of the market at least during early 2013," said Leon Westgate at Standard Bank in London.
   
China's Lunar New Year holiday begins Feb. 11, while markets will reopen on Feb. 18.

After strengthening to 2-1/2-month highs near $8,250 a tonne at the beginning of the year, copper prices have struggled to find momentum and last week touched a 2013 trough at $7,920 a tonne.

Waiting for the Chinese New Year
Reflecting diminished appetite for metals from investors, hedge funds and money managers cut bullish bets in copper in the week to Jan. 15, Commodity Futures Trading Commission data showed on Friday.

On the plus-side though, investors remain mindful that China's economy picked up steam in the fourth quarter, data showed last week, as infrastructure spending and a jump in trade signalled the foundation for a stable growth path.

"We still like the base metals and are looking for higher prices in Q1, but we may have to wait until after the Chinese New Year holidays in February for a decent rally to materialise now," said RBC Capital in a research note.

Lead was bid at $2,300 a tonne at the close, down $1 from Friday's close and off nearly 2 percent on the year, though Deutsche Bank said a severe cold spell in China could fuel a resurgence in demand for the metal used in battery making.

"We believe that the lead market could be one of the more attractive long opportunities this year. We would recommend buying on weakness," it said.

Soldering metal tin, the best base metals performer last year, was bid at $25,000 a tonne at the close, down 0.1 percent.

"Tin has continued its march upwards, although having risen 30 percent from the low of late October, it has lost a little momentum. After such large gains, a correction is possible, even likely. The LME-Shanghai arbitrage still does not favour Chinese exports but it is getting closer," said BNP Paribas in a note.

Zinc, used in galvanizing, fell 0.1 percent to close at $2,031.50 a tonne, aluminium was bid 0.2 percent weaker at $2,040.50 a tonne, while stainless-steel ingredient nickel, the worst performer on the LME last year, finished 1.0 percent weaker at $17,380 a tonne.

Barclays said in a note nickel prices were set to continue trending lower, weighed down by an increase in nickel pig iron, the lower nickel content substitute used by China increasingly in lower grades of stainless steel.

The bank forecast NPI production rising to 300,000 tonnes this year from 265,000 in 2012.
   
 Metal Prices at 1713 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2012   Ytd Pct
                                                              move
  COMEX Cu       365.80       -1.15     -0.31     365.25      0.15
  LME Alum      2040.75       -3.25     -0.16    2073.00     -1.56
  LME Cu        8059.75       -1.25     -0.02    7931.00      1.62
  LME Lead      2298.50       -2.50     -0.11    2330.00     -1.35
  LME Nickel   17425.00     -125.00     -0.71   17060.00      2.14
  LME Tin      24975.00      -50.00     -0.20   23400.00      6.73
  LME Zinc      2032.50       -1.50     -0.07    2080.00     -2.28
  SHFE Alu     15255.00      -30.00     -0.20   15435.00     -1.17
  SHFE Cu*     58190.00     -190.00     -0.33   57690.00      0.87
  SHFE Zin     15365.00      -55.00     -0.36   15625.00     -1.66
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
 

Copper Steady As Global Macro Signals Improve

Industry News 08:37:27AM Jan 22, 2013 Source:SMM

LONDON, Jan 21 (Reuters) - Copper was little changed in thin trade on Monday as a political attempt to break a budget impasse in the United States revived risk appetite, but was offset by still weak physical demand from top consumer China.

Three-month copper on the London Metal Exchange edged down 0.1 percent to close at $8,055 a tonne in low volumes due to a U.S. market holiday for Martin Luther King day.

Copper volume was 4,764 lots by the close of floor trading, compared to an average daily volume of 13,081 over the past two months. Copper hit a one-week high of $8,130 a tonne in the previous session before closing the week more or less unchanged.

U.S. House Republican leaders said on Monday they would seek to pass a four-month extension of federal borrowing authority on Wednesday to buy time for the Democrat-controlled Senate to pass a plan to shrink budget deficits.
 
European shares, seen by some as a proxy for growth, inched towards two-year highs in response on Monday, but investors were more cautious about sending copper to new highs given Chinese physical metal buying remains weak.

Data out earlier showed imports of refined copper by China, which consumes some 40 percent of the world's supplies of the metal, dropped 4.7 percent in December from November, though they were up 20 percent for 2012 as a whole.
 
"On the macro side base metals have even in the short term a bullish scenario, what is holding them back is actually the physical market. Many people say we have to wait until after the Chinese new year and probably they're right," said Gianclaudio Torlizzi, partner at metals consultancy T-Commodity.

"I'm not that worried about the general level of stocks (in China) because there's big question marks about availability of these stocks," he added.

The Chinese trade data also showed exports of refined copper surged 75.3 percent to a record 274,014 tonnes in 2012.

"Given the current overhang of Chinese bonded inventory, and recent changes in terms of tax environment and the granting of export licences, higher levels of Chinese refined exports are likely to remain a feature of the market at least during early 2013," said Leon Westgate at Standard Bank in London.
   
China's Lunar New Year holiday begins Feb. 11, while markets will reopen on Feb. 18.

After strengthening to 2-1/2-month highs near $8,250 a tonne at the beginning of the year, copper prices have struggled to find momentum and last week touched a 2013 trough at $7,920 a tonne.

Waiting for the Chinese New Year
Reflecting diminished appetite for metals from investors, hedge funds and money managers cut bullish bets in copper in the week to Jan. 15, Commodity Futures Trading Commission data showed on Friday.

On the plus-side though, investors remain mindful that China's economy picked up steam in the fourth quarter, data showed last week, as infrastructure spending and a jump in trade signalled the foundation for a stable growth path.

"We still like the base metals and are looking for higher prices in Q1, but we may have to wait until after the Chinese New Year holidays in February for a decent rally to materialise now," said RBC Capital in a research note.

Lead was bid at $2,300 a tonne at the close, down $1 from Friday's close and off nearly 2 percent on the year, though Deutsche Bank said a severe cold spell in China could fuel a resurgence in demand for the metal used in battery making.

"We believe that the lead market could be one of the more attractive long opportunities this year. We would recommend buying on weakness," it said.

Soldering metal tin, the best base metals performer last year, was bid at $25,000 a tonne at the close, down 0.1 percent.

"Tin has continued its march upwards, although having risen 30 percent from the low of late October, it has lost a little momentum. After such large gains, a correction is possible, even likely. The LME-Shanghai arbitrage still does not favour Chinese exports but it is getting closer," said BNP Paribas in a note.

Zinc, used in galvanizing, fell 0.1 percent to close at $2,031.50 a tonne, aluminium was bid 0.2 percent weaker at $2,040.50 a tonne, while stainless-steel ingredient nickel, the worst performer on the LME last year, finished 1.0 percent weaker at $17,380 a tonne.

Barclays said in a note nickel prices were set to continue trending lower, weighed down by an increase in nickel pig iron, the lower nickel content substitute used by China increasingly in lower grades of stainless steel.

The bank forecast NPI production rising to 300,000 tonnes this year from 265,000 in 2012.
   
 Metal Prices at 1713 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2012   Ytd Pct
                                                              move
  COMEX Cu       365.80       -1.15     -0.31     365.25      0.15
  LME Alum      2040.75       -3.25     -0.16    2073.00     -1.56
  LME Cu        8059.75       -1.25     -0.02    7931.00      1.62
  LME Lead      2298.50       -2.50     -0.11    2330.00     -1.35
  LME Nickel   17425.00     -125.00     -0.71   17060.00      2.14
  LME Tin      24975.00      -50.00     -0.20   23400.00      6.73
  LME Zinc      2032.50       -1.50     -0.07    2080.00     -2.28
  SHFE Alu     15255.00      -30.00     -0.20   15435.00     -1.17
  SHFE Cu*     58190.00     -190.00     -0.33   57690.00      0.87
  SHFE Zin     15365.00      -55.00     -0.36   15625.00     -1.66
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07