Copper Rises on Japan Easing Move, Dollar-Shanghai Metals Market

Hot Keywords

  • Inventory data
  • NPI
  • Zinc
  • Production data
  • Macroeconomics
  • Market commentary
  • Morning comments
  • Aluminium
  • Copper
  • Stainless steel
  • Mengtai Group
  • Nickel
  • Futures movement
  • In the United States
  • trade negotiations

Copper Rises on Japan Easing Move, Dollar

Industry News 11:45:17AM Jan 23, 2013 Source:SMM

LONDON, Jan 22 (Reuters) - - Copper rose to its highest level in more than a week on Tuesday, following other commodities markets and equities higher after Japan's central bank promised unlimited asset buying to boost economic growth.

The Bank of Japan, which has been under intense political pressure to overcome deflation, raised its inflation target to 2 percent and said that from 2014 it would adopt an open-ended commitment to buy assets.

Three-month copper on the London Metal Exchange, ended up 0.97 percent to $8,133 a tonne, up from $8,055 at the close on Monday. It earlier hit $8,135 a tonne, its highest since Jan. 11.

"The main driver today is the announcement out of Japan," T-Commodity metals consultant Gianclaudio Torlizzi said.

"In the medium and the long term it represents a bullish driver for base metals, because the Bank of Japan and the Federal Reserve are two of the main central banks which will continue to inject a lot of liquidity into the financial markets."

An unexpectedly strong survey of German sentiment, showing analyst and investor morale at its highest since May 2010, also helped metals.

There was in addition confidence in the steadiness of top metals consumer China's economic recovery, although metals buyers were wary over whether the Chinese will stock up before the week-long Lunar New Year holiday in mid-February.

"We still have to wait and see whether there is restocking ahead of Chinese New Year - the spot market remains the same for now. Demand might pick up at the end of the first quarter because of seasonality," said Chunlan Li, a Beijing-based copper analyst with consultancy CRU.

Copper stocks in China's bonded warehouses hit a record high of over 1 million tonnes in November, and its refined copper output climbed more than 20 percent in December to a record 580,000 tonnes.

The rising stockpiles and production could dampen China's appetite for spot imports and 2013 term shipments and are likely to weigh on benchmark LME copper prices.

Also holding back copper's gains, European and U.S. shares, seen as a proxy for growth, fell as investors awaited a batch of corporate earnings. They were largely unmoved, however, by a surprise drop in U.S. home sales in December.

On the plus-side, a softer dollar versus a basket of currencies, and against the yen, supported base metals. A weaker dollar makes metals priced in the U.S. currency cheaper for holders of alternative currencies.

Aluminium
China's aluminium production rose almost 24 percent in December. The country is the world's top producer of the metal.

Three-month aluminium closed up 1.69 percent to $2,075 per tonne from a last bid of $2,040.50 on Monday. Lead ended up 1.09 percent at $2,325 a tonne, and nickel  closed up 0.03 percent to $17,385 a tonne.

LME zinc closed up 1.06 percent at $2,053 per tonne, having earlier hit a two week high of $2,062.50 a tonne. Tin, the best performer on the LME last year, ended down 1.50 percent at $24,625 a tonne from $25,000.

"Tin (is) struggling to hold above $25,000. A 600 tonne increase in on-warrant (LME stocks) stocks this morning has added to the sense that prices are indeed consolidating for the time being," said Standard Bank in a note.

 Metal Prices at 1718 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       368.80        1.85     +0.50     365.25      0.97
  LME Alum      2072.00       28.00     +1.37    2073.00     -0.05
  LME Cu        8127.00       72.00     +0.89    7931.00      2.47
  LME Lead      2330.25       29.25     +1.27    2330.00      0.01
  LME Nickel   17432.00       52.00     +0.30   17060.00      2.18
  LME Tin      24726.00     -299.00     -1.19   23400.00      5.67
  LME Zinc      2060.25       28.75     +1.42    2080.00     -0.95
  SHFE Alu     15265.00       10.00     +0.07   15435.00     -1.10
  SHFE Cu*     58690.00      500.00     +0.86   57690.00      1.73
  SHFE Zin     15485.00      120.00     +0.78   15625.00     -0.90
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07

 

Copper Rises on Japan Easing Move, Dollar

Industry News 11:45:17AM Jan 23, 2013 Source:SMM

LONDON, Jan 22 (Reuters) - - Copper rose to its highest level in more than a week on Tuesday, following other commodities markets and equities higher after Japan's central bank promised unlimited asset buying to boost economic growth.

The Bank of Japan, which has been under intense political pressure to overcome deflation, raised its inflation target to 2 percent and said that from 2014 it would adopt an open-ended commitment to buy assets.

Three-month copper on the London Metal Exchange, ended up 0.97 percent to $8,133 a tonne, up from $8,055 at the close on Monday. It earlier hit $8,135 a tonne, its highest since Jan. 11.

"The main driver today is the announcement out of Japan," T-Commodity metals consultant Gianclaudio Torlizzi said.

"In the medium and the long term it represents a bullish driver for base metals, because the Bank of Japan and the Federal Reserve are two of the main central banks which will continue to inject a lot of liquidity into the financial markets."

An unexpectedly strong survey of German sentiment, showing analyst and investor morale at its highest since May 2010, also helped metals.

There was in addition confidence in the steadiness of top metals consumer China's economic recovery, although metals buyers were wary over whether the Chinese will stock up before the week-long Lunar New Year holiday in mid-February.

"We still have to wait and see whether there is restocking ahead of Chinese New Year - the spot market remains the same for now. Demand might pick up at the end of the first quarter because of seasonality," said Chunlan Li, a Beijing-based copper analyst with consultancy CRU.

Copper stocks in China's bonded warehouses hit a record high of over 1 million tonnes in November, and its refined copper output climbed more than 20 percent in December to a record 580,000 tonnes.

The rising stockpiles and production could dampen China's appetite for spot imports and 2013 term shipments and are likely to weigh on benchmark LME copper prices.

Also holding back copper's gains, European and U.S. shares, seen as a proxy for growth, fell as investors awaited a batch of corporate earnings. They were largely unmoved, however, by a surprise drop in U.S. home sales in December.

On the plus-side, a softer dollar versus a basket of currencies, and against the yen, supported base metals. A weaker dollar makes metals priced in the U.S. currency cheaper for holders of alternative currencies.

Aluminium
China's aluminium production rose almost 24 percent in December. The country is the world's top producer of the metal.

Three-month aluminium closed up 1.69 percent to $2,075 per tonne from a last bid of $2,040.50 on Monday. Lead ended up 1.09 percent at $2,325 a tonne, and nickel  closed up 0.03 percent to $17,385 a tonne.

LME zinc closed up 1.06 percent at $2,053 per tonne, having earlier hit a two week high of $2,062.50 a tonne. Tin, the best performer on the LME last year, ended down 1.50 percent at $24,625 a tonne from $25,000.

"Tin (is) struggling to hold above $25,000. A 600 tonne increase in on-warrant (LME stocks) stocks this morning has added to the sense that prices are indeed consolidating for the time being," said Standard Bank in a note.

 Metal Prices at 1718 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       368.80        1.85     +0.50     365.25      0.97
  LME Alum      2072.00       28.00     +1.37    2073.00     -0.05
  LME Cu        8127.00       72.00     +0.89    7931.00      2.47
  LME Lead      2330.25       29.25     +1.27    2330.00      0.01
  LME Nickel   17432.00       52.00     +0.30   17060.00      2.18
  LME Tin      24726.00     -299.00     -1.19   23400.00      5.67
  LME Zinc      2060.25       28.75     +1.42    2080.00     -0.95
  SHFE Alu     15265.00       10.00     +0.07   15435.00     -1.10
  SHFE Cu*     58690.00      500.00     +0.86   57690.00      1.73
  SHFE Zin     15485.00      120.00     +0.78   15625.00     -0.90
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07