LONDON, April 16 (Reuters) - Copper rose on Tuesday helped by a weaker
dollar and as upbeat housing data from the U.S. propped up hopes of more
solid metals demand growth, prompting some buying after a sharp fall in the
Three-month copper on the London Metal Exchange rose by 1.15
percent to close at $7,285 a tonne, from Monday's close of $7,202, when the
metal fell to its lowest for 1-1/2 years.
Commodity markets slumped on Monday after data showed China's economic
recovery unexpectedly stumbled in the first three months of 2013.
Risk sentiment also turned more positive on Tuesday thanks to data
showing that ground-breaking to build new U.S. homes rose in March to the
highest level since June 2008, adding to evidence of a healthier housing
market, which uses copper in construction.
"The housing data was good, it shows the U.S. recovery is
consolidating," T-Commodity consultant Gianclaudio Torlizzi said. "From a
long-term perspective the current copper price is exceptionally good for
buyers but in the short term things might be a bit shaky."
Economic growth in top metals consumer China has underwhelmed so far
this year but fundamentals for copper have improved slightly from a few
weeks ago, analysts said.
"Physical premiums for copper in Shanghai and falling stockpiles are
indicators that things are getting better," said Nic Brown, head of
commodity research at Natixis.
Copper stocks in bonded warehouses in Shanghai have fallen by about a
fifth in the past month fanning hopes that Chinese importers will resume
fresh orders soon.
"We don't think end user demand is that bad at the moment. We could
expect that as growth finally does pick up later in the year (in China)
that we will see stronger prices for base metals," Brown said.
China is the world's biggest copper consumer, accounting for about 40
percent of global demand.
A weaker dollar against a basket of currencies also supported copper
A softer U.S. unit makes dollar-priced commodities such as metals
cheaper for holders of other currencies.
Copper is down about 8 percent from the end of last year.
BUYING ON DIPS
Traders said consumers would start purchasing on dips below $7,100 a
tonne, while Chinese buyers have shown modest interest.
"After weakness initially, we have seen short-covering through $7,185
and $7,230. We are now looking at the $7,280 area for a break or
pull-back," said a trader in Hong Kong.
Reflecting a market in plentiful supply, little price support came from
news that Rio Tinto's Kennecott copper mine in Utah, the
second-biggest source of copper in the United States, would see a drop in
refined metal output of about 100,000 after a cave-in last Wednesday.
Other metals also recovered from multi-month lows hit in the previous
session. Soldering metal tin closed at $21,120 from $21,050 on
Monday while zinc, used in galvanising, ended at $1,896 from
Battery material lead closed at $2,065 from $2,033, aluminium
at $1,914 from $1,866, and stainless steel ingredient nickel
at $15,705 from $15,695.
Metal Prices at 1620 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
COMEX Cu 329.45 2.15 +0.66 365.25 -9.80
LME Alum 1914.25 48.25 +2.59 2073.00 -7.66
LME Cu 7295.00 93.00 +1.29 7931.00 -8.02
LME Lead 2070.00 37.00 +1.82 2330.00 -11.16
LME Nickel 15745.00 50.00 +0.32 17060.00 -7.71
LME Tin 21120.00 70.00 +0.33 23400.00 -9.74
LME Zinc 1900.75 31.75 +1.70 2080.00 -8.62
SHFE Alu 14595.00 20.00 +0.14 15435.00 -5.44
SHFE Cu* 53030.00 -690.00 -1.28 57690.00 -8.08
SHFE Zin 14580.00 75.00 +0.52 15625.00 -6.69
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07