Copper Up after U.S. Data, Supply Outlook Weighs-Shanghai Metals Market

Hot Keywords

  • Inventory data
  • NPI
  • Zinc
  • hydrogen stations
  • Market commentary
  • Copper
  • thép
  • Production data
  • Aluminium
  • Stainless steel
  • Macroeconomics
  • Morning comments
  • Mengtai Group
  • Lithium
  • Iron ore

Copper Up after U.S. Data, Supply Outlook Weighs

Industry News 08:52:12AM Jan 29, 2013 Source:SMM

LONDON, Jan 28 (Reuters) - Copper edged higher on Monday after better-than-expected U.S. durable goods data lifted confidence about growth and demand in the world's largest economy, but uneasiness about the growth of supply kept prices in check.

Three-month copper on the London Metal Exchange ended at $8,050 a tonne, up from Friday's close of $8,030 a tonne.

Copper prices hit intraday highs after data showed that U.S. durable goods orders rose 4.6 pct in December, surpassing expectations for a 1.8 percent gain.

Analysts said the market was likely to keep a close eye on U.S. economic data, including non-farm payroll numbers on Friday, a Federal Reserve meeting on Tuesday and political developments surrounding the U.S. budget, before investing more money in industrial metals.

"This (durable goods data) is a good number, no doubt, but people are on the sidelines. Investors are still guarded and there is uncertainty about how much growth we are going to see, and we also still have the key budget negotiations ahead," said Edward Meir, an analyst at INTL FCStone.

Hedge funds and money managers increased the size of their net longs in futures and options of gold, silver and copper last week on signs of continued improvement in the U.S. economy,
Commodity Futures Trading Commission data showed on Friday.

But copper length increased by a relatively small net 270 contracts to 16,438 contracts, evidence of slim investor conviction.

Weighing on the outlook for copper prices were expectations that large quantities of supply could enter the market this year.

Top copper producer Chile is seen producing 5.596 million tonnes of copper this year, up 3 percent from 2012 levels, as heavy mining investment pays off, the country's state copper commission Cochilco said on Monday.

A Reuters poll last week showed analysts expect new supply to push the market into a surplus of 120,000 tonnes in 2013.
 
"Generally, data this year have been positive through the key regions China, the U.S. and Europe, but copper will start underperforming this year, reflecting the idea that the market is on the cusp of moving from deficit to surplus," BNP Paribas analyst Stephen Briggs said.

China Economy
Also helping cement copper's gains, the head of China's sovereign wealth fund said on Saturday the Chinese economy, which grew at 7.9 percent in the fourth quarter, could pick up the pace to more than 8 percent in 2013.

China accounts for 40 percent of refined copper consumption.

Also on the data calendar is China's official purchasing manager's index (PMI) and HSBC's final PMI for January, which are expected to show an uptick in activity in the world's No.2 economy.

"Generally the consensus is that China's manufacturing sector should continue to show improvement. We're expecting a heavy volume of indicators towards the end of the week," Credit Suisse analyst Ivan Szpakowski said.

Chinese buying has remained subdued ahead of the Lunar New Year holiday. China's markets will be closed from Feb. 11 to Feb. 15.

In other trades, soldering metal tin ended at $24,400 from Friday's close of $24,700, while zinc, used in galvanizing, closed at $2,081 from $2,080.

Battery material lead ended at $2,378 from $2,355, aluminium closed at $2,050 from $2,046, while stainless-steel ingredient nickel ended at $17,625 from a last bid of $17,380.
   
 Metal Prices at 1702 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       365.30        1.05     +0.29     365.25      0.01
  LME Alum      2043.25       -2.75     -0.13    2073.00     -1.44
  LME Cu        8051.50       21.50     +0.27    7931.00      1.52
  LME Lead      2376.50       21.50     +0.91    2330.00      2.00
  LME Nickel   17601.00      211.00     +1.21   17060.00      3.17
  LME Tin      24350.00     -350.00     -1.42   23400.00      4.06
  LME Zinc      2080.00        0.00     +0.00    2080.00      0.00
  SHFE Alu     15165.00      -60.00     -0.39   15435.00     -1.75
  SHFE Cu*     58450.00     -180.00     -0.31   57690.00      1.32
  SHFE Zin     15570.00      -10.00     -0.06   15625.00     -0.35
 

Copper Up after U.S. Data, Supply Outlook Weighs

Industry News 08:52:12AM Jan 29, 2013 Source:SMM

LONDON, Jan 28 (Reuters) - Copper edged higher on Monday after better-than-expected U.S. durable goods data lifted confidence about growth and demand in the world's largest economy, but uneasiness about the growth of supply kept prices in check.

Three-month copper on the London Metal Exchange ended at $8,050 a tonne, up from Friday's close of $8,030 a tonne.

Copper prices hit intraday highs after data showed that U.S. durable goods orders rose 4.6 pct in December, surpassing expectations for a 1.8 percent gain.

Analysts said the market was likely to keep a close eye on U.S. economic data, including non-farm payroll numbers on Friday, a Federal Reserve meeting on Tuesday and political developments surrounding the U.S. budget, before investing more money in industrial metals.

"This (durable goods data) is a good number, no doubt, but people are on the sidelines. Investors are still guarded and there is uncertainty about how much growth we are going to see, and we also still have the key budget negotiations ahead," said Edward Meir, an analyst at INTL FCStone.

Hedge funds and money managers increased the size of their net longs in futures and options of gold, silver and copper last week on signs of continued improvement in the U.S. economy,
Commodity Futures Trading Commission data showed on Friday.

But copper length increased by a relatively small net 270 contracts to 16,438 contracts, evidence of slim investor conviction.

Weighing on the outlook for copper prices were expectations that large quantities of supply could enter the market this year.

Top copper producer Chile is seen producing 5.596 million tonnes of copper this year, up 3 percent from 2012 levels, as heavy mining investment pays off, the country's state copper commission Cochilco said on Monday.

A Reuters poll last week showed analysts expect new supply to push the market into a surplus of 120,000 tonnes in 2013.
 
"Generally, data this year have been positive through the key regions China, the U.S. and Europe, but copper will start underperforming this year, reflecting the idea that the market is on the cusp of moving from deficit to surplus," BNP Paribas analyst Stephen Briggs said.

China Economy
Also helping cement copper's gains, the head of China's sovereign wealth fund said on Saturday the Chinese economy, which grew at 7.9 percent in the fourth quarter, could pick up the pace to more than 8 percent in 2013.

China accounts for 40 percent of refined copper consumption.

Also on the data calendar is China's official purchasing manager's index (PMI) and HSBC's final PMI for January, which are expected to show an uptick in activity in the world's No.2 economy.

"Generally the consensus is that China's manufacturing sector should continue to show improvement. We're expecting a heavy volume of indicators towards the end of the week," Credit Suisse analyst Ivan Szpakowski said.

Chinese buying has remained subdued ahead of the Lunar New Year holiday. China's markets will be closed from Feb. 11 to Feb. 15.

In other trades, soldering metal tin ended at $24,400 from Friday's close of $24,700, while zinc, used in galvanizing, closed at $2,081 from $2,080.

Battery material lead ended at $2,378 from $2,355, aluminium closed at $2,050 from $2,046, while stainless-steel ingredient nickel ended at $17,625 from a last bid of $17,380.
   
 Metal Prices at 1702 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       365.30        1.05     +0.29     365.25      0.01
  LME Alum      2043.25       -2.75     -0.13    2073.00     -1.44
  LME Cu        8051.50       21.50     +0.27    7931.00      1.52
  LME Lead      2376.50       21.50     +0.91    2330.00      2.00
  LME Nickel   17601.00      211.00     +1.21   17060.00      3.17
  LME Tin      24350.00     -350.00     -1.42   23400.00      4.06
  LME Zinc      2080.00        0.00     +0.00    2080.00      0.00
  SHFE Alu     15165.00      -60.00     -0.39   15435.00     -1.75
  SHFE Cu*     58450.00     -180.00     -0.31   57690.00      1.32
  SHFE Zin     15570.00      -10.00     -0.06   15625.00     -0.35